As we approach another summer long weekend, I’m sure many of us are hoping for great weather and good times with family and friends. It also means that the rumour mill is starting to churn again that we need to plan ahead and gas prices are going to go up. I’ve watched long weekend pricing more carefully now for a number of years, and have seen that yes sometimes the prices do go up; but just as often as not they pretty much stay the same or even go down.
So, earlier this week I sat down with some of the folks in our retail pricing group to ask them directly about the myth that gas prices go up before every long weekend. They were pretty clear that the factors they use to make pricing decisions before a long weekend are no different from any other weekend of the year, or any day of the week.
We’ve talked here on PumpTalk many times about the different factors that go into the price of gasoline: the price of crude, commodity market prices for gasoline and local market forces. Of the three, local market forces would include issues such as local demand for fuel, and how that can be something that can affect price. It is also widely known that particularly in the summer months, during what we call the summer driving season, demand for fuel is higher. Basic economics would suggest that higher demand can put pressure on a market to lead to higher prices… On the other hand, when it comes to retail fuels, that is only one factor that goes into pricing decisions. So, even if demand goes up, like it often does in the summer, the other influences of crude oil and commodity costs can offset the upward pressure that is placed on pricing decisions from a demand point of view.
The bottom line I guess as we head into the long weekend, is that the folks in our pricing department come together on a daily basis and determine what they believe is an appropriate price for fuels on that day based on a number of factors. Whether it is leading into the long weekend in August, or a frosty Friday in February their decisions are based on the same factors and strategies they use day-in and day-out and are not influenced by the fact that we are all looking forward to an extra day of sunshine for the family picnic. Or, in my case, to swinging a fly on Bronte Creek for a few hours on Monday morning!
Photo Credit: Valerie Everett