The St. Paul and District Co-op is rationing diesel as increased demand and decreased supply reduced the amount available in Western Canada.
Part of the shortage is due to a fire at the Co-op refinery near Regina on Oct. 6. Other refineries in Alberta have experienced production challenges and combined with high seasonal demand, St. Paul Co-op has not received the amount of fuel it could sell.
“We’re not out but we’re coming very close at times and aren’t able to always give the customer the full amount of their order,” said General Manager Bob Scott. Co-op is trying to give everybody a portion of their order while keeping the cardlocks and gas bar operating.
The Town of St. Paul Public Works department is trying to keep its diesel machines topped off in preparation for winter, Manager Rick Robinson said. “If we had a heavy snowfall, I could end up with a problem,” he said.
With prices over $1.20 per litre, the budget could need changes if the price rises, he said.
Prices reached nearly $1.34/litre in Grande Prairie and ranged from $1.28 to $1.30/litre in Calgary over the weekend, according to albertagasprices.com.
The County of St. Paul’s regular supplier has restricted the amount it can buy, but the County has secured another supplier, said CAO Sheila Kitz. “We were scrambling to find fuel last week to keep our construction going.” With the snowfall over the weekend, the County finished the construction season on Monday. The County uses the most diesel during summer.
The price of diesel should not affect the County’s budget, but if high prices continue into the new year it would impact the budget, said Kitz.
The fire at the Regina refinery reduced production by 20 per cent, but the shortage in Western Canada is related to both supply and demand, said Vic Huard, vice-president of corporate affairs for Federated Co-operatives Ltd.
Huard cited “all those production challenges coming at the same time, combined with very high demand,” for causing the diesel shortage.
“There were still a lot of wheels in the field through October because people were taking advantage of the good weather,” he said, adding an increase in oilpatch activity and the peak season for forestry are contributing to high demand for diesel.
“There would be a diesel supply challenge in Western Canada even if our refinery in Regina was at full capacity.”
Even if Federated Co-op were to come back at full capacity tomorrow, a diesel shortage would still affect Western Canadians because of production problems at other refineries. Federated Co-op does not anticipate the shortage to be as acute through the winter as farm demand and other demands decline.
“The demand side will probably ease, and then as the refineries in Edmonton get back online … We’re going to see the situation ease.” Federated Co-op expects its production to be less than full capacity until May, 2012. The cause of the fire is under investigation.
