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

Just Posted

BREAKING: Gabby’s Country Cabaret announces ‘heartbreaking’ permanent closure

Owner Steve Gallagher ‘holds out hope’ of a new future for the 35-year-old nightlife hotspot

Aldergrove’s drive-in theatre stops showing films after 50-car limit comes into effect

Tuesday night was exceptionally quiet at Metro Vancouver’s only drive-in theatre –… Continue reading

VIDEO: Langley Community Music School Fiddlers release series of video recordings

Year-end concert covers include Cripple Creek, Tennessee Waltz, and a bevy of Beatles tunes

Councillors spar with developer over Willoughby shopping site

Council argued over density, mixed-use, and the definition of “strip mall” on Monday

VIDEO: Semi-truck rolls over into ditch on Glover Road

There was no reports of any serious injuries but traffic is delayed in both directions

B.C. records no new COVID-19 deaths for the first time in weeks

Good news comes despite 11 new test-positive cases in B.C. in the past 24 hours

Facing changes together: Your community, your journalists

Thanks for helping the Langley Advance Times to continue its mission to provide trusted local news

BC Corrections to expand list of eligible offenders for early release during pandemic

Non-violent offenders are being considered for early release through risk assessment process

Officials looking for answers after Abbotsford football star found dead in Sask. lake

Saskatchewan Health Authority looking into circumstances surrounding Samwel Uko’s hospital visit

Fraser Valley driver featured on ‘Highway Thru Hell’ TV show dies

Monkhouse died Sunday night of a heartattack, Jamie Davis towing confirmed

B.C. visitor centres get help with COVID-19 prevention measures

Destination B.C. gearing up for local, in-province tourism

Most Read