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)

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

Maple Ridge RCMP continue search for Atefeh Jadidian

The police released a new photo showing the missing woman walking east on Dewdney Trunk Road

Street drug deaths drop by half in Maple Ridge

City last on list of 15 with highest number of fatalities

COMMUNITY NETWORK: Weekend wellness event connects Indigenous with resources

Culture can be a medicine for Aboriginal people, as columnist Ginna Berg explains ahead of Saturday

LETTER: Teck was a threat to the environment

Stan Hutchison compared the tarsands mine to the advent of the computer industry

Stories of sexual assault at B.C. tree planting camps ‘shocking but not surprising:’ advocate

Contractors’ association is working with trainers to create respectful culture

Notorious B.C. fugitive to be extradited from California on murder charge

Brandon Nathan Teixeira submitted to extradition during court proceedings Thursday in Sacramento

Canada prepared to monitor for community spread of COVID-19: Tam

The U.S. confirmed one case of the new coronavirus, or COVID-19, in California Thursday

Decade-long health care battle draws to a close today in B.C.

Dr. Brian Day began his battle a decade ago against the B.C. government

Speaker ‘will not tolerate illegal activity’ on B.C. legislature grounds, says chief of staff

Chief of staff to the B.C. speaker Alan Mullen says situation with demonstrators appears ‘fluid’

Conservative MP questions whether rail blockades constitute terrorism

Crown-Indigenous Relations Minister Carolyn Bennett travelled to B.C. to meet Indigenous leaders

Lawsuit over African mine can be heard in British Columbia: Supreme Court

B.C. courts dismissed Nevsun’s attempts to make Eritrea the forum for any lawsuit proceedings

Most Read