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PEI gasoline retailers granted increase in margins

Gasoline retailers on Prince Edward Island can expect to see a much needed improvement in their financial bottom line, thanks to the efforts of the PEI Retail Gasoline Dealers Association.

The association was recently successful in convincing the Island Regulatory and Appeals Commission that an upward adjustment in the allowable minimum and maximum retail dealer markups on gasoline and diesel fuels was warranted.

The association undertook a comprehensive analysis of the costs involved with the retail sale of petroleum products on the Island, supported by financial statements from a representative group of independent retailers covering the period since the last major PEI retail dealer markup adjustment in 1991. The study clearly showed that markup levels dating back to 1991 failed to cover current operating costs, let alone generate a profit.

losing money at the pump

In its 56 page brief to IRAC, the association noted that over fifty percent of the retailers operating in 1991 have gone out of business. Rural communities on PEI appear to have experienced the greatest number of closures.

The study also showed that many Island retailers were becoming reluctant to continue with the provision of full service because of the added costs. RGDA President Wayne Vloet expressed satisfaction with the Commission’s decision to improve the retail dealer markups, noting that “while the increases were not as much as the association had requested, they are certainly most welcome.” Vloet suggested that “the impact on individual motorists will be minimal while better enabling retailers to provide a high level of service to the motoring public throughout the Island.”  

Approved changes will be incrementally introduced as follows: (cents per litre)

   January 1, 2008  June 1,2008
Self Serve 4.5  to  6.0 4.5  to  6.5
Full Serve 6.0  to  8.5 6.5  to  9.5

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