Ontario experiencing fuel shortages, price hikes

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The current fuel shortage has sparked gas rationing in parts of Ontario, has triggered the temporary closures of gas stations and has Canadian truckers concerned about diesel supplies and rising prices, the Windsor Star reported today, Feb. 28.

“Some trucking company owners locally are keeping an eye on the situation with great concern,” Paul LeFave, a Windsor member of the Ontario Trucking Association, told the Star. If it gets any worse, the OTA warns, truckers could soon be parking their rigs and consumers could see skyrocketing prices posted at the pumps and surcharges slapped on retail goods. “You’re affecting the supply chain of the economy … I hope we’ve seen the worst of it,” said LeFave, a sales agent who represents several Ontario-based trucking companies.

Imperial Oil won’t give exact numbers but told the Star that about a quarter of its 400 Ontario gas stations closed at the start of the week because of fuel shortages, and dozens of Petro-Canada stations in the Toronto area were idled for hours at a time after their pumps ran dry. Four or five of Shell Canada’s 200 service stations in the Toronto area experienced temporary shortages, company spokesman John Peck told the Star.

“We have not seen the worst of it yet, even though many companies are scrambling to find fuel and prices continue to escalate,” OTA president David Bradley said. The association said at least one major fuel retailer has issued advisories to customers that some areas “may face critical supply issues” and that “shortages and disruptions could occur” in Windsor, London, Sault Ste. Marie and the Niagara Peninsula. “The situation could get desperate, and there could be a run on diesel fuel,” Bradley said.

Over the past two weeks, gas prices in some Ontario markets have seen their biggest surges since Hurricane Katrina damaged U.S. refineries and cut supplies in September 2005. According to the Star, the current shortages are being blamed on a number of factors, including a two-week national rail strike that ended Monday and a recent fire at the Nanticoke refinery of Imperial Oil, Canada’s largest fuel supplier.

To compensate for rising fuel costs, trucking companies have been increasing the surcharge costs they add to their shipping invoices, added billings that observers like LeFave and Canadian Manufacturers & Exporters president Perrin Beatty said will be passed on to consumers. “We’re not in crisis yet, but we’re at a critical juncture,” Bradley told the Star.

Steve Erwin, a spokesman for Ontario Energy Minister Dwight Duncan, told the Star the shortage is expected to continue into next week, although the end of the CN Rail strike should ease the situation over the next few days.