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

42nd annual Williams Lake Harvest Fair wants you!

Think you might have just canned the best pickles ever?

Williams Lake Slo-Pitch League geared up for year-end tournament

“It’s been a great year and we’re looking forward to this weekend,” Barbondy said.

Delay powers way to berth at strongman nationals

Delay finished in the top four in his weight division in Richmond at the provincial championships

Joe Borsato leaves the Museum of the Cariboo Chilcotin

Museum of the Cariboo Chilcotin coordinator Joe Borsato bid farewell to his position at the museum

SD27 hires new finance manager

Barrett Gaunce is presently corporate controller for Northwest Territories Housing Corp. in Yellowknife

VIDEO: Facebook rolls out tool to block off-Facebook data gathering

CEO Mark Zuckerberg announced the “clear history” feature more than a year ago

RCMP originally planned to arrest Meng Wanzhou on plane, defence lawyers say

The allegations have not been proven in court. Meng was arrested Dec. 1 at Vancouver airport at the behest of the U.S.

Bodies of two missing Surrey men found near Ashcroft

Ryan Provencher and Richard Scurr have been missing since July 17

Ethics commissioner ready to testify on Trudeau, SNC-Lavalin: NDP critic

A new poll suggests the report hasn’t so far hurt the Liberals’ chances of re-election this fall

Inflation hits Bank of Canada 2% target for second straight month

Prices showed strength in other areas, including an 18.9 per cent increase in the cost of fresh vegetables

Pregnant teachers fight to change WorkSafeBC compensation rules

Agency does not recognize risk to unborn babies when mother catches illness from work

Five hedgehogs quickly adopted after being left at BC SPCA

Lucky new owners picked up their pets from Maple Ridge branch on Aug. 20

B.C. cricket players get interrupted by racist remark

Community has had protocols in place for years to respond to prejudice

Most Read