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Oilpatch capital spending fell by 54% in second quarter, StatCan reports

Statistics Canada says capital spending in the country’s oil and gas sector fell by 54 per cent in the quarter ended June 30 as numerous producers chopped budgets amid sliding global oil prices.

The federal agency says the industry spent about $3.88 billion in the three-month period, down from $8.46 billion in the first quarter and $8.59 billion in the second quarter of 2019, as a global price war and demand destruction caused by the COVID-19 pandemic eroded crude prices.

In June, the Canadian Association of Petroleum Producers estimated that $23.3 billion would be spent in the oil and gas production sector in Canada this year, a downward revision from about $37 billion in its January forecast.

Last week, the Canada Energy Regulator said it expects oil production in Canada will average 4.38 million barrels per day this year, down by 6.6% compared with 2019.

Earlier this week, IHS Markit reported that world oil demand has grown by 13 million barrels per day in the four months since the bottom of the COVID-induced collapse in April to about 89% of last year’s levels.

It says it expects demand growth to plateau at roughly 92 to 95% of 2019’s average output of around 100 million barrels per day through the first quarter of 2021 as travel-related fuel demand remains subdued until virus vaccines are widely available.


British Columbia pumps new regulations into its wholesale fuel market

Last week the B.C. government announced new regulations targeted at fuel wholesalers in the province. The new regulations impact companies that import, purchase, store and distribute gasoline and diesel products intended for sale at retail stations in B.Cpumping-gas-500-x-400_0. These groups will now need to make regular reports starting October 2020 to The British Columbia Utilities Commission (BCUC). The information from these businesses must include details on fuel imports, storage capacity, bulk sales and wholesale prices.

The new rules come after motorists cried foul when retail fuel prices hit the roof during the summer of 2018 ($1.60+/litre). The wholesale fuel sector told OCTANE at the time that higher taxation (45% of the price of a litre of gas in Vancouver is a tax), as well as the higher cost of bringing products to B.C. and the ‘Crack Spread’ (refiners’ margin),  were at the heart of the record setting pump prices. The B.C. government suggested price fixing was to blame. They launched a study to see if this was the case.

For years, British Columbians have felt like they are getting gouged when they fill up at the pump. Thats why our government asked our independent energy watchdog to do an investigation into gas prices,said Bruce Ralston, Minister of Energy, Mines and Petroleum Resources. According to Ralston, BCUC’s inquiry found a lack of competition and significant markups in the B.C. market. Discoveries also included a 0.13 cent per-litre premium charged to drivers that industry was unable to explain. The inquiry concluded that British Columbians were paying $490 million per year more than they should have to fuel their cars and trucks.

Working to uncover the pricing structure of fuel products, B.C.’s government enacted the Fuel Price Transparency Act (FPTA) in the fall of 2019. The Act brought in mandatory reporting requirements for gas and diesel wholesalers. Next (March 2019), the government named the British Columbia Utilities Commission to be the independent administrator of the FPTA. The province also authorized the Commission to collect and publish data on fuel pricing to promote competition in the market.

“We know that from the  BCUCs investigation into gas prices that four companies control around 90% of the wholesale market in southern B.C.,Ralston said, mentioning that the new regulations are designed to offer transparency and accountably for unexplained markups and prices increases.

 The B.C. government reports that further regulations are in the works for the other parts of the fuel supply chain, including the retail market.

Kelly Gray can be reached at

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Price and location power gas sales: C-store IQ National Shopper Survey

What do people consider important when they are making a gasoline buying decision? We found out in the C-store IQ National Shopper Study from Convenience Store News Canada and OCTANE. The findings offered an in-depth examination of the convenience channel and were revealing. 

Screen Shot 2020-04-14 at 12.40.36 PMC-Store IQ is the first convenience and gas specific study that delves into the wants, needs, perspectives and habits of Canadian consumers. We surveyed more than 1,000 convenience shoppers across the country to bring our readers and our partners the insights and data necessary to better understand customers and achieve business success. 

With average visits to gas stations running 4.67 times a month, our study found that price and location were and continue to be the two biggest drivers when it comes to gasoline purchase decisions. When it comes to preferences younger generation shoppers visit c-stores much more often and would rather visit a c-store than purchase gas from a gas-only retailer when compared to older generations. This indicates a desire to make the most of weekly gas purchase trips either to buy daily staples or a quick meal.

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Millennials (6.8 X a month) report a much higher average number of gasoline ‘trips’ over a monthly period compared to Gen X (4.51 X a month) and baby boomers (3.65 X a month). And, while male to female gas purchase decisions showed an even split in c-store gas purchase decisions, more males (54%) than females (42%) were interested in buying fuel from gas-only retail sites.

We found that 47% of respondents were dedicated to gas-only sites. In turn, 34% bought fuel solely at c-store, 16% looked to warehouse clubs such as Costco and 12% looked to grocery and supermarket sites with gas for their fuel buys. Here, millennials (17%) were most likely to buy gas from a grocery/supermarket than older boomer (9%) generation shoppers.

 Price (74%) and location (64% ) continue to be the most important factors for shoppers when deciding where to purchase gasoline. Store appeal (34%) and store/gasoline brand (35%) were found to be much less influential. A convenient location is of higher importance to females (68%) compared to males (59%). Millennials (39%) rate store appeal as more important compared to boomers (31%).

 The bottom line is that a convenient location with additional services and a competitive price is the formula for gas sale success. Convenience, service and price bring in customers. What operators do to maximize this opportunity determines the overall business viability.