We have all felt the impact of fluctuating pump prices. As with all publicly-traded commodities, there are a variety of factors that affect the price of crude, which then impacts the price we pay at the pump. Weather, world events, market speculation, and fluctuations in supply and demand all impact the price of crude oil and the wholesale cost of gasoline that is passed on to the retailer. Pioneer's pricing policy is simple – we strive to be the low-price leader in the markets we serve by securing the best available wholesale prices.
Pioneer derives its income solely from the gross retail margin of 7¢ per litre. Out of this amount comes operating expenses, credit card fees, fuel delivery, maintenance, agents' commissions and wages, hydro, the cost of loyalty programs, overhead, financing and other expenses. After these expenses, we are left with a very slim net profit retail margin.
Independents like Pioneer must purchase their product from the major oil companies - those who own and operate refineries - and at the same time compete with them at the retail level. As an independent we run on low margins, so we need high volumes to stay in business. 95% of the pump price is made up of crude oil, refining costs and taxes. The reality is that the final 5% of the pump price is the total margin that's left over for the independent retailer to cover all of its costs including salaries, utilities and maintenance before profits can be realized. This small, always-fluctuating retail margin is often simply not enough to keep the independent retailer in business.
Based on a price of $1.225 / litre ($100.00 / Barrel)
5.7% Gross Retail Margin= 7¢/litre
3% represents cost
2.7% represents profit
51.3% Crude (@$100/barrel) = 62.9¢/litre
11.3% Refiner Margin = 13.8¢/litre
31.7% Taxes - 38.8¢/litre
Centre for Energy
The Centre for Energy provides information on all aspects of the Canadian Energy System. The portal was created to meet a growing demand for balanced, credible information about the Canadian energy system and energy-related issues. Explore how Canadian energy is produced and used and learn how each energy source is an integral part of the Canadian energy mix by visiting the Centre for Energy website.
What is Octane?
When you drive up to the pumps, you can see that Pioneer offers three grades of gasolines - Silver (87 Octane), Gold (89 Octane) and Platinum 91 (91 Octane).
The Octane rating of gasoline is a measure of the fuel's ability to resist engine knock, or ping. Engine knock is caused when the air-fuel mix in the cylinders of your car's engine explodes prior to the sparkplug firing, rather than burning evenly across the cylinder when the sparkplug does fire.
Optimum performance and fuel economy are achieved when the Octane rating of the gasoline is appropriate for the engine of your vehicle. Check your owner's manual to determine the Octane rating most suitable for your vehicle.
As your vehicle ages, the octane requirement tends to increase because of engine deposits.
Octane requirements also tend to increase on hot days and when barometric pressure is high.
Your engine's octane requirements decrease at higher altitudes because of the decrease in barometric pressure.
Engine performance in modern vehicles may be enhanced by using higher-octane fuels where called for in your owners manual. Computerized engine systems will slow engine timing if octane levels are not high enough to eliminate knock. Using a higher-octane fuel, in vehicles that call for higher octane, speeds up the timing, enhancing performance in vehicles that call for higher octane