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SOMBA K'E/YELLOWKNIFE - Earlier this week, average gas prices in Yellowknife jumped from $1.48 a litre to $1.57 a litre overnight.

Some places, like the Yellowknife Direct Charge Co-op, saw a full 10-cent increase. It's not, however, a move to profit the store, said Co-op general manager Ben Walker.

Cameron Jeffrey fills up his Mazda with $70 worth of gas last week in anticipation of price hikes as Hurricane Ike blasted Texas. - Lauren McKeon/NNSL photo

"That's the frustrating part. People think tons of money is being made at the retail level and it's not."

Oil companies' profits, he added, "are billions and billions higher, so I think you can pretty much identify who's making the money."

The Co-op buys its gas from a multinational in Hay River. Gas from that seller - which he would not name - is more expensive than from Edmonton, where the Co-op had been buying its gas until six months ago, Walker said, but shipping is cheaper.

"It's fat guy, skinny guy. They get you coming and going," he quipped.

Walker added that the Co-op is actually making less money this year than it did the last. That's partly because wholesale gas purchase prices have risen, especially in the last week, as major refineries in the U.S. shut down in anticipation of Hurricane Ike in Texas.

Each tanker that comes to the Co-op buys holds about 55 thousand to 60 thousand litres of gas - and the Co-op has bought at least one tanker's worth of gas at the recently-increased prices.

"The implications of potential supply shortfalls are driving prices higher right across the country," said Catherine Hay, senior associate at MJ Ervin & Associates. The Calgary-based company does weekly surveys of more than 400 gas station dealers. Indeed, beginning last week prices at the pump rose about 10 to 12 cents across Canada.

Gas bars in Yellowknife were actually slow to follow the spike, with prices only rising on Tuesday.

"The price stayed down because we were following the market and nobody moved, so we didn't move," Walker explained.

Cameron Jeffery took advantage of this, filling up his tank on Sunday before the increase could reach Yellowknife. Even so, he said, it cost him $70 to fill up his Mazda compared to $40 five years ago and he's pretty sure gas prices will go up again. "It's the world we live in, we need to get used to it," he said.

"Everybody knew it was coming," Walker agreed.

He added the reason the Co-op follows the market is because the company doesn't want to get into a price war. "We admit that we're a follower, but it's worked out very well for Co-op members over the years," he said.

Carlos Gonzales, owner of Yellowknife Outdoor Adventures, has been a Co-op member since the 1980s. He acknowledged the initial jump put him off, but once he spoke to Walker he realized how few profits made on gas actually go back to Co-op members.

Speaking of his business, he added, "from the point of view of an outfitter, these gas prices are detrimental to our operation, as (they are) for everybody else.

"We're all feeling it in the pocket."