Gasoline is transported from refineries to major distribution terminals by pipeline or ship. Most but not all Canadian refineries have terminals, which may be located elsewhere, to be closer to major markets.
Trucks and trains move gasoline to market, sometimes via bulk plants from which local deliveries are made.
Large trucks called “B-trains,” often using two trailers and capable of carrying up to 65,000 litres, move the gasoline, particularly to larger stations. Larger stations have tanks big enough to accept a full load. Large stations can sell this much gasoline in less than a day.
Trucks distributing from terminals generally deliver gasoline to stations no farther than a round-trip distance achievable in a driver’s shift. Secondary bulk plants, which may be supplied by rail, serve stations beyond that range.
Every step in the distribution chain adds to costs. The cost of delivering gasoline rises the more it is handled and the further it travels. But this is still not usually the main reason prices differ from place to place.
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Why are gasoline prices different in different areas?
Gasoline prices vary from place to place for many reasons. Tax rates vary from one province to another and, in some cases, within provinces. Some areas experience higher costs than others. Stations farther from the major terminals that supply them incur higher transportation costs. Stations in large urban centres generally sell higher volumes so their cost per litre is lower. In addition, such large stations often have more opportunity to sell other goods and services, and these additional revenues make it possible for their gasoline to be sold for less.