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

Just Posted

GOWN UP to raise $10m for Surrey Memorial Hospital upgrades

The money will be used to upgrade 10 operating rooms, buy cutting-edge equipment and recruit more top-notch surgeons

Lord Tweedsmuir downs Seaquam in high school football

The Panthers improve to 3-1, move into a tie for second in the Eastern Conference

Canucks’ Diwali Night game gives Surrey’s Heer the thrill of DJ-ing for his favourite team

‘It should be a good game with (Alexander) Ovechkin in town’ on Oct. 25, says Jovan Heer

UPDATED: British couple vacationing in Vancouver detained in US after ‘accidentally’ crossing border

CBP claims individuals were denied travel authorization, crossing was deliberate

‘A monumental step’: Surrey Food Bank finds new, much larger home in Newton

The charity is expected to make the move next summer

VIDEO: #MeToo leader launches new hashtag to mobilize U.S. voters

Tarana Burke hopes to prompt moderators to ask about sexual violence at next debate

After losing two baby boys, B.C. parents hope to cut through the taboo of infant death

Oct. 15 is Pregnancy and Infant Loss Awareness Day in B.C.

Cheating husband sues mistress for gifted ring after wife learns about affair

The husband gave his mistress $1,000 to buy herself a ring in December 2017

B.C. massage therapist reprimanded, fined for exposing patients’ breasts

Registered massage therapist admits professional misconduct

B.C. boosts legal aid funding in new payment contract

‘Duty counsel’ service restored in some communities, David Eby says

Rugby Canada helps recovery efforts in Japan after typhoon cancels final match

Canadian players wanted to “give back in whatever small way they could”

$100,000 reward for B.C. gangster extended to United States

Police belive fugitive Conor D’Monte may be in the Los Angeles area

Emily Carr University closed Sunday after fire causes some damage

The school is working with Vancouver police to assist their investigation into the fire

Alberta to join B.C.’s class-action lawsuit against opioid manufacturers, distributors

B.C. government claims opioids were falsely marketed as less addictive than other pain meds

Most Read