Vancouver expected to headline long Canadian summer of high gasoline prices

Premier John Horgan asked the B.C. Utilities Commission to consider investigating

A gas pump is pictured in North Vancouver on April 17, 2019. Gasoline prices are expected to remain just below record highs all across Canada this summer except in Vancouver — where a perfect storm of factors will likely ensure motorists continue to set new all-time records at the pumps. (THE CANADIAN PRESS/Jonathan Hayward)

A gas pump is pictured in North Vancouver on April 17, 2019. Gasoline prices are expected to remain just below record highs all across Canada this summer except in Vancouver — where a perfect storm of factors will likely ensure motorists continue to set new all-time records at the pumps. (THE CANADIAN PRESS/Jonathan Hayward)

Gasoline prices are expected to remain just below record highs all across Canada this summer except in Vancouver — where a perfect storm of factors will likely ensure motorists continue to set new all-time records at the pumps.

Fuel market analysts say average retail prices in Canada are within a penny or two of their year-ago levels, which were some of the highest on record for many markets.

“Vancouver certainly is (at historic highs) but the other major markets we’re looking at, such as Calgary, Toronto, Halifax, Montreal, they’re not exceeding historical levels, they’re basically at historic levels,” said Michael Ervin, senior vice-president at the Kent Group Ltd.

The average price of gasoline in major Canadian markets last week was about $1.34 per litre, but it varied from around $1.23 in Calgary and Winnipeg to the high of $1.70 or more in Vancouver.

READ MORE: Gas prices 101: Where B.C. drivers’ pretty pennies are going at the pump

Gasoline prices rise every spring due to factors including the higher cost of making summer gasoline — which requires an extra four or five cents per litre for additives to prevent evaporation — and supply interruptions as refineries shut down for routine maintenance, the analysts said.

Prices have also risen in part due to the federal carbon tax on fuel that was applied to Saskatchewan, Ontario, New Brunswick and Manitoba on April 1.

Analyst Dan McTeague of GasBuddy.com said demand will support fuel prices this year, but other factors could cause predictions to change if oil prices are affected.

“Demand is really strong in the United States, it’s OK in Canada, but the signals are really going to depend on geopolitics and on whether or not the world finds itself in a trade war. All bets are off in that circumstance,” he said.

The rising prices in the Vancouver area have put pressure on B.C. Premier John Horgan who last week asked the B.C. Utilities Commission to consider investigating why prices have risen by more there than in the rest of the country.

The analysts say there’s no mystery — British Columbians are paying more because the province’s two small refineries don’t produce enough to supply the market so they rely on imports from Alberta on the Trans Mountain pipeline, which is full, and U.S. refineries in Washington, which have been hit with longer-than-expected spring outages.

McTeague said the cost of an average litre of gasoline in Vancouver breaks down to about 52 cents per litre for the oil, 33 cents for the U.S. refinery, four cents in wholesaler markup, about 12 cents in retailer margins, 52.5 cents in federal, provincial and municipal carbon taxes and 10 to 15 cents per litre due to B.C.’s low carbon fuel standard regulations.

The last item is a hidden cost that’s difficult to measure, he said. It establishes a minimum renewable content and carbon intensity level in fuel, while requiring credit trading if those targets aren’t reached.

Parkland Fuel Corp., which owns the 55,000-barrel-per-day capacity Burnaby, B.C., refinery, says it operated at a utilization rate of about 92 per cent in the first quarter of 2019 and that it started processing bio-fuels such as canola and tallow to help bump up its production of lower carbon intensity fuels.

Prices in Canada will be supported over the summer by higher prices in the United States, where domestic demand is expected to be robust and where fuel exports are on the rise, Ervin said.

Last week, the U.S. Energy Information Administration raised its forecast for nationwide average gasoline prices through September to US$2.92 a gallon, about seven cents more than last summer, partly due to higher margins for refining gasoline.

Dan Healing, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Nobody will be turned away from the Salvation Army Ridge Meadows Ministry in the next couple of days as temperatures are expected to dip below freezing. (THE NEWS/files)
Ridge Meadows Salvation Army calls for extreme weather response

Freezing temperatures forecast tonight and Friday, snow on the weekend

Madeline Merlo announced a new record deal with Broken Bow Record Music Group. (Facebook/Madeline Merlo)
Maple Ridge country artist signs record deal in Nashville

Madeline Merlo signed with Broken Bow Record Music Group

The Meadow Ridge Female Hockey Association has received a government grant to help weather the pandemic financially.
Ridge Meadows sports organizations given pandemic relief

Three associations approved for government grants

Tony Lam sent in this image of the community looking towards Golden Ears Mountain. (Tony Lam/Special to The News)
SHARE: Tranquil view of Golden Ears Mountain

Send us your photo showing how you view Maple Ridge or Pitt Meadows, and it could be featured soon

CP’s proposed logistics park would be in the fields just across the tracks from its intermodal yard in Pitt Meadows. (Google)
Pitt Meadows wants higher tax rate for CP Rail

Councillors decry a rate that equates railway to a dentist’s office

Businesses continue to struggle under COVID-19 restrictions as the pandemic reaches the one-year mark. (B.C. government)
Another 564 COVID-19 cases, mass vaccine plan coming Friday

15 more deaths, community cluster declared in Williams Lake

Premier John Horgan leaves the podium following his first press conference of the year as he comments on various questions from the media in the Press Gallery at B.C. Legislature in Victoria, B.C., on Monday, January 13, 2020. THE CANADIAN PRESS/Chad Hipolito
Interprovincial travel restrictions a no-go, Horgan says after reviewing legal options

The B.C. NDP government sought legal advice as concerns of travel continue

Gem Lake Top, at Big White Ski Resort, seen at Jan. 8. (Big White Ski Resort)
Big White cancels $7.3M in lift tickets, accommodations due to COVID-19 orders

Since November, the ski resort has been forced to make several changes

Jan. 21 marks the 21st day of the 21st year of the 21st century, according to some. (Black Press Media file photo)
The 21st day of the 21st year of the 21st century is upon us

Milestone won’t be back for another 100 years

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Darlene Curylo scratched a $3M ticket, BCLC’s largest ever scratch and win prize. (BCLC)
Kelowna woman in shock after winning BCLC’s largest-ever instant-ticket prize

Darlene Curylo couldn’t believe her eyes when she saw the amount of money she’d won from a scratch ticket

While each person has different reasons for becoming homeless, a UBCO study shows they learn through their interactions with different services to perform ‘as homeless’ based on the expectations of service providers. (Contributed)
Kelowna homeless forced to ‘perform’ for resources, says UBCO study

One participant in the study said ‘It is about looking homeless, but not too homeless’

Gov. Gen. Julie Payette takes the royal salute from the Guard of Honour as she makes her way deliver the the throne speech, Wednesday, September 23, 2020 in Ottawa. THE CANADIAN PRESS/Fred Chartrand
Gov. Gen. Julie Payette resigns, apologizes for ‘tensions’ at Rideau Hall

Payette, who is the Queen’s representative in Canada, has been the governor general since 2017

Grounded WestJet Boeing 737 Max aircraft are shown at the airline’s facilities in Calgary, Alta., Tuesday, May 7, 2019. WestJet will operate the first commercial Boeing 737 Max flight in Canada today since the aircraft was grounded in 2019 following two deadly crashes. THE CANADIAN PRESS/Jeff McIntosh
Passengers unfazed as WestJet returns Boeing 737 Max to service on Vancouver flight

After a lengthy review process, Transport Canada cleared the plane to return to Canadian airspace

Most Read