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SOMBA K'E/YELLOWKNIFE - Yellowknifers paid among the highest prices in Canada for gas in 2008.

Prices for last year averaged out to 132 cents per litres, according to Calgary-based MJ Ervin and Associates Inc. The only other city listed with prices that high was Labrador City, Nfld., which tied with an average price of 132.1 cents.

Nick Beliveau, an employee at Yk Motors service station, stands by the gas tanks where many Yellowknife motorists fill up. Last year Yellowknifers saw some of the highest gas prices in the country. - Cara Loverock/ NNSL Photo

Average gas prices in Canada Yellowknife: Labrador: Vancouver: Whitehorse: Ottawa: Calgary: Winnipeg: Montreal: 132 132.1 120.6 125.4 108.6 110.1 114.6 118.2

Gas prices hit their highest in Yellowknife in September at 152.6 cents for regular gasoline. The lowest gas prices in Canada that month were found in Ottawa and Kingston, Ontario at 118.9 and 118.8 cents per litre respectively.

"I would imagine that (Yellowknife) is either the highest or amongst the highest in the country every year, not just last year," said Catherine Hay, senior associate with MJ Ervin and Associates.

She said one of the biggest reasons for the high price in Yellowknife, as well as places like Labrador City, is the size of the market and the amount of gas being sold.

"If you take an extreme example like a market like Toronto where each gas station, many of them are selling in excess of six million litres a year. You compare that to the average gas station in Yellowknife which, I suspect is probably selling less than a million a year," said Hay.

She said a Yellowknife gas station would be generating less revenue while operating at the same margin as a southern gas station.

"Basically they need to earn more on every litre because they're selling so many few litres," said Hay.

"They're not doing the volume of some of the large, urban centres."

Another reason for the high prices is the cost of transporting fuel.

Tony Macerollo, vice-president of the Canadian Petroleum Products Institute in Ottawa, said Yellowknife is paying more because of the location and distance from other cities.

He said increased costs can be partially blamed on the transportation used to deliver the fuel.

"You don't have a pipeline, to the best of my knowledge, and you don't have rail, so you're relying on truck," he said.

"Generally speaking in larger markets there is going to be more competition which is going to drive transportation costs down."

When you are in a more remote location there is going to be just a certain reality to that."