Farmers squeezed by high fuel prices

By Nigel Maxwell
February 2, 2018 - 8:16am

Already faced with high input costs, Saskatchewan farmers may feel a tighter squeeze this year according to one petroleum industry analyst.

Dan McTeague with Gasbuddy.com said the price for regular gas and diesel is 10 cents higher in Saskatchewan, compared to a year ago. 

"We've had three years of overproduction of oil globally, that's starting to become reined in and at the same time, the global economy is starting to increase its demand and appetite for oil products," he said.

One such example was laid out recently during U.S. President Donald Trump’s State of the Union Address when he discussed his ambitious $1.5 trillion plan to rebuild the country’s infrastructure and put people to work.

In January, 2016, the price of oil ranged from $47 to $52. A year later the price now ranges from $62 to $70 dollars a barrel and McTeague said he has heard some speculation from other industry analysts the price could even reach $75 a barrel by the end of the year.

"So any way you slice it it's been an expensive year and it's about to become an even more expensive year going forward in terms of all petroleum products," he said.

McTeague said farmers in Saskatchewan will either have to find a way to pass on the costs or absorb them.

"What of course this all means is there is going to need to be a more intense focus by [the federal government] and the provinces on ensuring these prices, which are now becoming inflationary, are mitigated to the extent they can by Ottawa and Regina," he said.

 The Saskatchewan Association of Rural Municipalies (SARM) has an agriculture committee and President Ray Orb said the topic of diesel prices was brought up as recently as this week.

"We're seeing that the prices are too high on the gasoline side but diesel fuel especially, the gap is widening and we're not 100 per cent sure why," he said.

SARM did pass a reolution last year asking for the government to look into the high fuel prices. Orb said beyond a few inquiries, not much has been done with that but added they will likely revisit the resolution. Orb said he is also aware of a refinery being built in Alberta, northeast of Edmonton, which he hopes will help alleviate some of the high fuel costs.

 

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