In theory, gasoline prices in Ontario should be 73 cents a litre and not in the 90 cent range. We shouldn’t complain though because fuel prices are currently at levels not seen since June 15, 2010.
Minden, Ontario (PRWEB) January 26, 2015
Boating Georgian Bay (http://www.BoatingGeorgianBay.com), Ontario’s highest traffic recreational boating website, seasonal digital boating magazine and popular webcast Boating Georgian Bay TV series, predicts that lower fuel prices should play a positive influence on the 2015 boating season. Mark Coles, an avid boater and owner of First Page SEO (http://www.first-page-seo.com) the parent company of Boating Georgian Bay, explains the reasons for falling fuel prices. He advises marinas to take advantage in the drop in fuel costs to get the Ontario boating industry back on track.
“When folks put their boat away in the fall, it wasn't on anyone's radar that the cost of a barrel of oil would be cut in half. If the big drop at the pump doesn't get boaters back out cruising for the 2015 season, then nothing will. Oil analysts don't see prices rising dramatically anytime soon as Saudi Arabia is intent on putting the small-cap, higher cost oil drillers & frackers out of business, while punishing Russia and Iran economically for their arms support in Syria. The Saudis have indicated that there is no artificial bottom for oil and that competitive forces and the marketplace will have its way. Thanks to US shale oil and the Canadian oil sands, combined with a manufacturing downturn in China, there is a glut of oil available on the market,” explains Coles.
“In theory, gasoline prices in Ontario should be 73 cents a litre and not in the 90 cent range. We shouldn’t complain though because fuel prices are currently at levels not seen since June 15, 2010. The last time we paid this little in Ontario by example, the HST, which added 9.2 cents to the cost of a litre of fuel, didn't exist. The Canadian dollar was 12 cents stronger and retail margins in places like Toronto were something like 1.5 cents less per litre. However, diesel fuel hasn't come down that much because, just after the fall farming harvest begins, diesel use soars and so does the price. Diesel fuel cost tracking is almost directly related to home heating oil use. As such, diesel prices normally fall below gas prices from April to October and then rise above gasoline from November to April. By the time the boating season starts in May, diesel should be down to the price range of gasoline or perhaps below. The wild card is whether marinas will pass on the savings to boaters. Traditionally marinas always price fuel well above the street price,” says Coles.
“There are several reasons boat fuel costs more than auto fuel. Most marinas don't sell as much gasoline/diesel as land-based service stations, and that boosts the cost marinas have to pass on to customers. The demand for boat fuel is seasonal, running from May to October, so marinas have to make the most of their revenue from fuel during that time. Marinas also have to spend more on spill prevention, and that adds to their costs. But let’s face it, marinas have been in a tight squeeze for some years, and they will try and eke out every dollar they can. Marina operations with foresight should be considering reducing the upside margin over street prices. Why? Because if the ultimate goal is growth in slip sales and service revenue, it will only come if more people buy more boats and use them. Fuel isn't a huge money maker for marinas ... but fuel prices set the tone for all boaters in terms of how active they are with their boat and whether they move up or down in boat size,” states Coles.
“Operating costs (including fuel) are a major factor to potential new boaters as they try to justify the economics vs. pleasure relationships of boat ownership. Car owners are susceptible to the same rational when it comes to the road. A recent survey indicated that 7.1% of car owners plan to buy a bigger vehicle as a result of the new norm in lower fuel prices. Anyone who has been to a boat show has likely seen this first hand. It's a hard sell for the average guy trying to convince his practical partner that it's a good idea to buy their first new or brokerage boat when it's going to use thousands of dollars in fuel. The fuel cost is one of the top mental barriers to boat ownership. The counter to this is that many new consumers can afford to own a boat now because the cost of money is low, and we haven't seen fuel costs this cheap in a long, long time. It's not an obvious transitional effect but rather a slow and steady transition to higher boat ownership numbers and increased boating activity, says Coles.
Coles adds, “So the message to marinas is they need to do their part in helping current and prospective boat owners with lower boat fuel operating costs and it will come back to reward them over the near term in added slip sales, service, storage and accessory sales.”
About Boating Georgian Bay: Ontario’s busiest boating directory, averaging over 5,000 hits a day, Boating Georgian Bay is an online marina, accommodation & event directory covering all of Georgian Bay. The popular website offers useful information for Georgian Bay boaters; everything from weather, local attractions, yacht charters, marinas and marine services, boat brokers, local history, places to eat, and much, much more. Whether planning a long or short-term cruise around Georgian Bay, be sure to check out GeorgianBay.com for up-to-date news, events, and any other boat related services you’ll need in the Georgian Bay area. For further information, or to advertise on Boating Georgian Bay, call 705 286-3656 or visit http://www.BoatingGeorgianBay.com.
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