Gas Prices and Fuel Economy
How are gas prices set?
See our PumpTalk blog for the factors that affect gas prices
Why do retail gasoline prices vary so much between markets and even within the same city?
While retail prices follow changes in crude and wholesale commodity prices, both up and down, they are also heavily influenced by local conditions. Factors such as market size, the level of competition, taxes, and retailing and distribution efficiencies can lead to situations where prices vary considerably between communities or change dramatically within a short period of time.
- Who sets the price of gasoline at a station?
This varies depending on the mode of operation. Some Petro-Canada branded facilities are independently owned and operated, while others are company owned and operated by a lessee or agent.
- Prices for the independently owned and operated sites are set by the operator.
- Prices for the company owned and lessee or agent operated sites are set by Petro-Canada.
Although an independent retailer may be able to choose the price at their retail site(s), the need to remain competitive with the surrounding market means that ultimately the local market dictates the maximum price.
- How do taxes affect gas prices?
- Taxes are one of the largest components of the retail price of gasoline, accounting for about 32%, or 40 cents per litre of the average pump price in Canada in 2012.
- The combination of taxes and crude oil costs together represents approximately 80% of the price at the pump.
- The remaining 20% must cover all costs of refining, transporting, distributing, marketing and retailing, as well as provide for a reasonable return on investment for the retailer and the company.
Understand what you pay at the pump
- Why does the world price of crude oil or gasoline matter when we have our own crude oil and refineries here in Canada?
Canada operates in a global marketplace. A producer of a commodity or finished product in Canada would not choose to sell it at a lower price in Canada versus selling it at a higher price to a foreign buyer, or vice versa. For this reason, prices for products made in Canada can neither be significantly higher nor lower than foreign made products.
Canada has little influence on the global price of crude oil, as domestic production is roughly 4% of total world production.
Do prices go up just before a long weekend?
Prices don’t always rise prior to a long weekend. Consumers may pay closer attention to gasoline prices when they fill up before or during a long weekend trip, however industry data shows no such pre-long weekend price increase trend.
According to a 2011 report by MJ Ervin & Associates (a division of Kent Marketing Group), gas stations neither raise nor lower their prices prior to long weekends.
Visit our PumpTalk blog for more on the study
Understand how gas prices are set
Where can I get more information on gasoline pricing and the petroleum industry?
How can I find out about the facilities and gas pricing at a specific Petro-Canada station?
Visit our Location Finder for information on site offerings, such as gas pricing, service type, fuel types and facilities.
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How can I improve my fuel economy or save on fuel?
Vehicle type, driving style, good vehicle maintenance and driving conditions have the greatest effect on fuel economy. Driving for best fuel economy involves:
- Smooth, steady acceleration
- Maintaining moderate speeds
- Avoiding heavy loads
- Avoiding a luggage rack or towing a trailer unnecessarily
- Avoiding using air conditioning or heating unnecessarily
- Not idling the engine when it could be switched off (generally not longer than 10 seconds), and
- Avoiding short trips where the engine does not have the opportunity to fully warm up.
Maintenance factors include:
- A properly tuned engine
- Clean air filters
- Aligned and balanced wheels
- Tires with the correct air pressure
- Periodic changing of the fuel line filter (in older vehicles)
Driving conditions that can reduce fuel economy include:
- Cold temperatures
- Head winds
- Snow on the road
For more tips on fuel efficiency, visit our PumpTalk blog.
- Will higher octane improve a vehicle's fuel economy?
Generally, higher octane will not improve fuel economy. In fact, the difference in composition or heating value of different grades of gasoline plays a small role in fuel economy. Good fuel economy is a result of vehicle design and weight, good vehicle maintenance and driving style.
So what does a higher octane fuel mean for your vehicle?
Higher octane helps:
- Clean your car’s fuel injectors and intake valves — and keep them clean
- Optimize fuel economy
- Reduce emissions
- Improve your overall vehicle performance, year-round
Read about Ultra 94™, a high octane fuel
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