Gas prices dip below $1 a litre in Sudbury

As world oil prices continue to tumble, consumers in Sudbury are seeing the benefit at the pump.

Prices went under $1.00 a litre in Greater Sudbury -- reaching as low as $0.989 at some locations in the city – after soaring as high as $1.479 in June.

While the reasons for collapsing oil prices are complex, a surge in supply from fracking in the U.S. and Saudi Arabia's willingness to let the price drop to squeeze out higher-cost producers are generally considered to be the biggest factors.

Whatever the cause, some of the biggest users in Sudbury will be benefiting – along with taxpayers.

Renée Boucher, executive director of Sudbury's School Bus Consortium, says the operators of the 400 school buses in the city were already covered by the province, who helped them out when prices soared.

“So if gas prices increase within a certain range, we need to pay the operator, and if it's under that range, the operator pays the consortium,” Boucher said.

The Ministry of Education agreed to help school boards with gas prices, with the expectation that they would continue increasing. The contract with bus operators calls for them to pay more when prices escalate, and less when it drops.

“We've always been in the escalator part of it,” she laughs.

While the drop in price won't be a boon locally, Boucher said the province as a whole will benefit.

“The good thing is the province recognized they needed to help our operators (absorb) the rising cost of fuel. So that has helped us in the past.”

Shannon Dowling, media relations officer with Greater Sudbury, said the city budget will benefit directly, since their gas contracts for their fleet of snow plows, transit buses and other city vehicles are adjusted as prices fluctuate.

“We are positively affected by the decrease in gas prices,” Dowling said. “Our contract is not a fixed rate. So when gas prices come down, our prices come down, as well.”

However, a report on how that will affect the city budget is still being prepared, she said.

Police Chief Paul Pedersen said the service buys gas in bulk at a fixed rate, to give them stability in prices. But they, too, will save money if prices stay low.

“Absolutely, there are some savings that will be found with (lower gas prices),” he said.

“We purchase our gasoline in bulk, so we're not hit as much by the price fluctuations. But if it were to stay as low as it is now for an entire year, it would be a potential for significant savings.”