By Geoff Smith (@GeoffSmithLNN on Twitter)

Medicine Hat drivers get break at pumps, but it’s costing the stations

Oct 24, 2018 | 11:32 AM

LETHBRIDGE – Drivers in Lethbridge may be wondering why their pocketbooks are taking a hit that their neighbours in Medicine Hat are not.

The price at most gas stations in Lethbridge is $1.269 as of Wednesday, Oct. 24. But just down Highway 3 in Medicine Hat, it’s $1.129. Many prices in Calgary are even lower. Dan McTeague, senior petroleum analyst with GasBuddy, chalks it up to a gas war in the “Gas City.”

“If I’m a gas station, and it really doesn’t matter who, (I’m) paying about a buck-14 to buy my gasoline. That’s taxes-in. So, if I’m selling for $1.129, obviously in Medicine Hat, we’re taking a beating and gas stations are having to compensate or make up the loss, which is not just one cent when you consider their whole cost,” he said.

“Their own wholesale cost is higher than what they’re retailing it for. You’re obviously having to make up the difference selling other products: your beef jerkies, your tires, your coffees or whatever you can buy in the store. Otherwise, you will be bankrupt.”

McTeague said a gas war often starts with a big-box retailer like Costco, which doesn’t take as much of a hit from selling below cost because of membership fees and not taking all the same credit cards. Other nearby stations don’t want to lose market share, so they match the price.

Nighttime construction on Hwy 3 in Lethbridge starts April 17

Apr 17, 2025

SASHA launches #BuyABed fundraiser to support vulnerable Lethbridge residents

Apr 04, 2025

$20K grants available: TELUS STORYHIVE Pan-Asian Edition opens applications April 1

Mar 18, 2025

Who’s making the money? McTeague said, in addition to the taxes that make up part of the price, refinery owners are taking crude that costs around 54 cents/litre, based on the West Texas Intermediate price, and turning it into gasoline for another eight or nine cents. Companies that own refineries and retailers, therefore, can afford to withstand a gas war.

That said, Lethbridge has seen prices slowly move lower, and McTeague said that should continue as American refineries resume operation.

“We’re likely looking a scenario in Lethbridge of prices going below $1.24 over the next 48 hours, and of course, we’ll see what happens in Medicine Hat, because of course, prices there have also indicated that they are going down by the same amount.”

by Geoff Smith (@GeoffSmithLNN on Twitter)

Medicine Hat drivers get break at pumps, but it’s costing the stations

What's Happening