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

Former Cloverdale youth pastor guilty of one count of sexual assault

Judge cites reasonable doubt in finding Samuel Emerson not guilty of majority of charges

Athletes to mentor Surrey students with $720K boost for ‘Classroom Champions’

Program will involve close to 6,000 students and 150 teachers over the next three years

Transgender inmate loses court case against Surrey Pretrial

Petitioner argued denial of transfer to women’s prison was unreasonable and unfair

Whalley-area developer named Surrey’s Business Person of the Year

Charan Sethi among winners at 2019 Surrey Business Excellence Awards gala

Surrey agency receives $250K to open ‘no cost’ legal clinic

Law Foundation of B.C. provided the grant to Sources Community Resources Society

VIDEO: Canadian allergists’ group wants Benadryl behind the counter due to side effects

Some doctors say the medication is over-used because of its easy availability

Yelling at your dog might hurt its long-term mental health: study

Researchers find dogs trained using negative reinforcement are more ‘pessimistic’

Vancouver Island soap company releases Lucky Lager beer soap

Beer-infused olive oil soap comes out just in time for holiday shopping

Jagmeet Singh says he’ll vote against throne speech if NDP requests not met

Singh is to meet with Prime Minister Justin Trudeau on Thursday

Community uses loophole to paint 16 rainbow crosswalks after B.C. council says no

So far 11 rainbows are painted and five planned, all since council denied the first proposal in September

Workers’ camp at LNG facility in Kitimat takes shape

Extensive worker camp now being assembled

238 and counting: Vancouver gelato shop sets Guinness World record for most flavours

Vince Misceo has come up with 588 different flavours over the decades

Killer who fled to Taiwan day after shooting B.C. man over $80 sentenced 13 years later

The sentence comes 13 years after Shaoxin Zhang, 19, was killed in a Burnaby parking lot

Most Read