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

Just Posted

Valley field hockey players bring home gold from nationals

Cowichan U18s help Island to unprecentend first-place finish

Peewee B Thunder capture provincial lacrosse title

Cowichan goes unbeaten all year; Akhurst named tournament MVP

Rayner family shocked by theft of memorial fire pit from Lake Cowichan

Roasting wieners at the site is part of a fun ritual when the family visits Darreld Rayner’s memorial

Coming up in Cowichan: MS Bike this weekend; Easter Seals Camp Shawnigan

MS Bike is personal for Heather Armstrong MS Ambassador Heather Armstrong has… Continue reading

VIDEO: Sod-turning for $10 million Cowichan Hospice House a joyful event

A happy crowd gathered near Cairnsmore Place to celebrate the arrival of Hospice House

B.C. man pleads guilty in snake venom death of toddler

Plea comes more than five years after the incident in North Vancouver

Trudeau says Ottawa open to proposals for B.C. refinery as gas prices soar

Prime minister says he knows B.C. residents are struggling and the federal government is open to ideas

Clock’s ticking to share how you feel about Daylight Saving Time in B.C.

Provincial public survey ends at 4 p.m. on Friday

Couple found dead along northern B.C. highway in double homicide

Woman from the U.S. and man from Australia found dead near Liard Hot Springs

Trudeau announces $79M investment for 118 more public transit buses across B.C.

Contributions from municipal to federal level to fund more buses in a bid to cut commutes

Justin Trudeau’s carbon footprint revealed in ranking of world leaders

Travel company ranks 15 world leaders’ foreign flight CO2 emissions

B.C. First Nation’s group using ads in Texas targeting company for fuel spill

The Heiltsuk Tribal Council has called out Kirby Corporation for the Nathan E. Stewart oil spill

Most Read