What affects Shell’s wholesale price and the refiners margin?
Refined products like gasoline and diesel fuel are internationally traded commodities at the wholesale level. As a refiner, Shell Canada sets its wholesale price for each commodity based on supply and demand in Canada and internationally. To do this, we look at posted commodity prices – known as benchmarks – that are set, for the most part, in places like New York, Seattle, and Minneapolis. These then help us determine what our competitive domestic wholesale prices will be in places like Montreal, Vancouver and Edmonton. The refiner’s margin is the difference between the cost of crude oil and the wholesale price we receive from the market. The refiner’s margin represents the amount out of which Shell must pay all of its refining costs. The profit is what’s left over. 5. Why does the price vary from region to region? • The cost of transportation and taxes (provincial and municipal) varies between regions. • The amount of fuel a station can sell may also affect price. A Shell station tha
