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RISK: Wildfires partially behind fuel shortage in Western Canada | Canadian Insurance
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RISK: Wildfires partially behind fuel shortage in Western Canada

Suncor’s Petro-Canada stations across Western Canada are running short on fuel because of a refinery outage in Edmonton and the Fort McMurray wildfires.

Suncor spokeswoman Sneh Seetal said the cumulative effects of lower crude production because of the fires and the Edmonton outage mean the company has been producing less diesel and especially less gasoline for its retail operations.

“Given the prolonged duration of the fires and its impact on the supply for our refinery, as well as ongoing planned seasonal maintenance in the industry, our product inventories are greatly reduced,” Seetal said.

The company is reporting temporary shortages at Petro-Canada stations in Alberta, Saskatchewan, Manitoba, and in the British Columbia Interior.

To help fill the gap, Suncor is bringing in more gasoline and diesel by truck and rail from its own network as well as from third parties.

Seetal added that Suncor is prioritizing supplies to go to stations in areas it has deemed as critical were there are few or no other refuelling options. The company has also designated the town of Fort McMurray as critical.

The gasoline shortage comes as prices have spiked 10 cents a litre in recent days across the Prairies, says Gasbuddy.com petroleum analyst Dan McTeague.

The price increase is more related to two major refineries in the U.S. Midwest also being knocked out and record demand down south, but the Suncor outage isn’t helping, McTeague said.

“This is really bad timing,” he said. “There’s three not so positive stories for motorists right now.”

He said that while the Petro-Canada shortages might not have caused a spike in prices yet, it isn’t helping.

“It won’t help bring them down. If you have a shortage in the system it’ll keep prices up artificially,” said McTeague.

Michael Ervin, senior vice-president at energy consultancy the Kent Group Ltd., says the Edmonton outage has already led to a five cent differential in wholesale Western Canadian gas prices compared with Ontario.

“That, I think, is reasonably attributable to a tightness in the Edmonton market now,” said Ervin.

But he said Suncor’s 142,000 barrel-a-day refinery is only expected to be out for another week so the wider impact should be limited.

“The anticipated date for it to be back online is a matter of a few days,” said Ervin. “Given that I don’t think there’s going to be a wider ripple effect here.”

Seetal said it was difficult to say when supplies would return to normal but that Suncor is working to restore the refinery and restart its oilsands operations to provide more crude oil input to its system.