After receiving a few comments from Okotoks residents suspecting alleged price gouging at local gas stations we've done some investigating, and it turns out the issue is easily explained.

Multiple residents have contacted us pointing out a big discrepancy in gas prices during the morning and later in the day, some suspect the stations may be increasing gas prices to catch commuters.

For example, on Tuesday gas prices increased to 111.9 in the morning and dropped to 97.9 in the early afternoon.

Dan McTeague, Senior Petroleum Analyst with GasBuddy.com says the only reason for the sudden changes is retailers selling gasoline for below cost throughout the day.

"Gas stations are trying to restore a margin to survive on, you can't buy gasoline today for under 99 cents," he says. "You're seeing 111.9 mostly as a reflection of some retailers trying to get back what is the normal 12 cent a litre retail margin. That's the margin you need for electricity, to honour credit cards, and pay your staff."

McTeague explains at 97.9 a litre retailers can't survive, but to stay competitive they continue to bleed profits until another station breaks, which is why multiple station's pricing changes at the same time.

"In all due fairness a gas station cannot survive in Okotoks under 1.06 a litre today, so how they're able to do it? Maybe they've got a generous uncle, a friendly bank, or basically they're praying for the next opportunity for gas prices to be restored back to where it should be to keep their nose above proverbial financial water line."

He says this is a classic case of margin restorations, which happens in every city across Canada, and can happen over a day, or over a week.

"The timing on this could be more coincidental than anything else. The fact is someone has to throw in the towel, someone has to come up for air, you can't continue to sell gasoline for below cost."

Even if the timing wasn't coincidental, McTeague shares gas stations can change prices whenever, to whatever they see fit.

"You could charge zero or you could charge $1,000 a litre, if you want to stay in business it's what the market will bear."

For up to date gas prices in Okotoks click here.

Questions, comments, or story ideas? Email us at news@okotoksonline.com