B.C. gas prices rose with land values, but high costs still not fully clear: report

Report for BC Utilities Commission can’t fully point to why wholesale gas prices are so high

Drivers fuel up vehicles at a gas station in Vancouver. (THE CANADIAN PRESS/Darryl Dyck)

Gasoline prices in B.C. have risen in line with land costs and credit card processing fees, but that doesn’t fully explain why they’re so much higher than in other parts of Western Canada, a new report says.

The report by Deetkten Group was posted online late Wednesday by the B.C. Utilities Commission, which is overseeing a public inquiry into sky-high gas prices in the province.

The consultant’s report says Vancouver’s gasoline retail margins, which are the difference between the wholesale price for fuel and the retail price less tax, “highly” correlates with local land values.

It also says credit card processing fees are applied as a percentage of a total transaction, meaning the fees will be higher in jurisdictions like Vancouver where prices at the pump are already high.

“Rising land costs and credit card processing fees may account for nearly the entire differential observed between Vancouver and comparable areas, at least up to the end of 2018,” the report says.

But even after those factors are taken into account for this year, 1.4 cents per litre in the retail margins remains unexplained.

The report also can’t fully explain why wholesale gas prices are much higher in B.C. cities compared with other jurisdictions.

The consultants compared wholesale prices in Vancouver and Kamloops with Edmonton and Seattle, which are also sources of supply for B.C.

Transportation and regulatory costs may account for higher wholesale gas prices in B.C., but even estimating those costs at their highest potential doesn’t explain the difference, it says.

“Even the highest estimates of transport and regulatory costs combined do not sufficiently account for the differential in wholesale prices between the Vancouver market and the Edmonton and Seattle markets, particularly in 2019,” the report says.

READ MORE: Most suppliers won’t release profit margin details for B.C. gas-price inquiry

A differential of about five cents per litre between Vancouver and Edmonton this year is unaccounted for in the report.

Unlike gas prices, diesel prices have remained largely consistent with historical trends when compared with other parts of Western Canada.

“This may be in part due to different demand dynamics in the diesel market,” it says.

Premier John Horgan ordered the inquiry in mid-May as the price of a litre of regular gasoline climbed above $1.70.

In commissioning the probe, he said that gas and diesel price increases were “alarming, increasingly out of line with the rest of Canada, and people in B.C. deserve answers.”

Four days of oral submissions are to begin next week and the three-member panel can question industry representatives, including gas and diesel suppliers.

Amy Smart, 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

Comments are closed

Just Posted

Three graduating SD69 students earn prestigious foundation awards

Recipents plan to continue their impactful work in the service of others

PQBeat Podcast: Ed Mayne talks COVID-19, potential pool for Parksville

Mayor returns to ‘PQB News’ studios to detail summer plans

B.C. Supreme Court dismisses claim against Island Corridor Foundation

Snaw-Naw-As (Nanoose) First Nation was seeking return of reserve land as railway sits unused

B.C. accommodators need phone lines to light up as in-province travel given green light

Travel restrictions during the COVID-19 pandemic have decimated the tourism and hospitality industries

300 Cache Creek residents on evacuation alert due to flood risk as river rises

Heavy rainfall on Canada Day has river rising steadily, threatening 175 properties

First glimpse of Canada’s true COVID-19 infection rate expected mid-July

At least 105,000 Canadians have tested positive for COVID-19 since the coronavirus was identified

Nanaimo RCMP ask for help finding missing 19-year-old

Haley Murphy has not been seen since Tuesday, June 30, say police

Police ramp up efforts to get impaired drivers off B.C. roads this summer

July is dedicated to the Summer CounterAttack Impaired Driving Campaign

PHOTOS: B.C.’s top doc picks up personalized Fluevog shoes, tours mural exhibition

Murals of Gratitude exhibit includes at least one portrait of Henry alongside paintings of health-care workers

‘Mind boggling’: B.C. man $1 million richer after winning Lotto 6/49 a second time

David O’Brien hopes to use his winnings to travel and of course keep playing the lottery

Annual music event in Comox Valley celebrates online instead

Vancouver Island MusicFest holds virtual celebration set for July 10

Migrant workers stage multi-city action for full status amid COVID-19 risks

‘COVID-19 has exacerbated an existing crisis’

Most Read