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Independent fuel operators trying to hang on as prices and demand plummet
LONDON, ONT -- In 47 years of business, Ken’s Autocare Centre has never had an unscheduled closing.
But Ken Reath, who operates the combined auto service centre and gas station, feels he had little choice but to shut his business down temporarily.
On Monday, he idled the Dundas Street East location amidst concerns about COVID-19 and falling gas prices.
With the price-per-litre in London sitting around 65 cents Wednesday, Reath said he was awaiting more details from his parent fuel supplier to see if independent operators like himself can continue.
“We are going to try and reopen in the next day or two,”, he tells CTV News.
Reath's business is unique in London. It’s one of less than a half-a-dozen gas stations to offer full service.
He says his clients, especially seniors, rely on his employees to pump gas.
So, he’s working on a way to protect them both, through physical distancing and a new plastic screen he’s installed in front of his register.
While those measures will add barriers to protect against COVID-19, Reath isn’t sure how to protect himself against business losses from low gas prices.
Every level of oil production is being hit hard by the retail price of gas, and the market price of a barrel of oil.
While major oil producers may sustain the losses in the long-term, Reath questions the ability of independent gas station operators to weather the COVID-19 crisis.
“It’s unknown territory, I don’t know”, he concludes.
Steep drop in gas prices across the region
Repeated sharp drops in gas prices have brought the cost of a fill-up to a level not seen in years.
Wednesday morning prices in London had plummeted once again, with prices spotted at 65.9 cents a litre.
In Windsor prices were reported to be as low at 63.9 cents per litre according to gasbuddy.com.
The price drop was part of an expected drop overnight across southern Ontario.
The cause for the low prices is due to a sharp drop in global demand due to COVID-19 and an oil war between Russia and Saudi Arabia.
A month ago the average price of gas across Canada was just under 112.8 cents per litre, according to gasbuddy.com.