Disgusted drivers can be excused for thinking the era of cheap energy prices has somehow bypassed B.C. Gas prices have barely budged from a year ago despite a more than 50 per cent plunge in crude oil prices.

Gas prices stubbornly high despite oil’s deep dive

Blame U.S. refineries, low loonie for the persistent pain at the pumps in B.C.

Gas prices remain stubbornly high despite the latest slide in crude oil prices and infuriated Lower Mainland motorists are feeling gouged yet again.

Metro Vancouver gasoline is down only slightly from $1.40 a litre a year ago, while crude has plunged more than 50 per cent from around $98 a barrel to less than $44 as of Friday.

It’s as if the widely heralded era of cheap energy has bypassed B.C.

But petroleum industry analysts say it all boils down to supply and demand.

Crude oil accounts for less than half of the end cost of a litre of gasoline, with government taxes and refining charges the other big factors.

“I wish there was a simple explanation,” said Jason Parent of the Kent Marketing Group. “There isn’t much of a relationship on a day-to-day basis between crude oil and retail gasoline.”

Expecting gas to move in lockstep with crude oil is somewhat akin to expecting house prices to follow lumber prices, without recognizing scarce land or an influx of buyers might have an influence.

Parent said crude and gas prices can go in different directions for different reasons, and gas prices in B.C. can diverge from what other Canadians pay – which is what’s happening now.

Most of the difference between Metro Vancouver prices and the rest of the country is explained by the higher 17-cent-a-litre TransLink tax as well as B.C.’s carbon tax.

Motorists are paying just over $1 in Alberta, a few cents more in Saskatchewan and Manitoba, and $1.10 to $1.20 in most of Eastern Canada.

But even after taxes are factored out, Vancouver prices are 5 to 15 cents a litre higher than most other cities across Canada.

The reason, Parent said, is that Vancouver-area prices follow those along the U.S. west coast, where the wholesale gas supply has been constricted by refinery problems in California, driving prices up.

“Wholesale prices have been high there relative to the rest of the U.S. for a month now,” Parent said.

Some gasoline comes to B.C. through the Kinder Morgan pipeline, but the rest comes from Washington State or other U.S. refineries.

If prices were sharply higher in Vancouver than cities to the south, Parent said, gas would flow back to the U.S. – resulting in shortages here – or wouldn’t be shipped north in the first place.

Another “huge” factor behind why Canadians in general aren’t yet seeing much relief at the pumps is the drop in the loonie over the past year.

Crude and wholesale gas are priced in U.S. dollars, so Canadians are paying with a devalued currency that simply doesn’t go as far as it did a year ago.

So who is profiting from the persistently high pump prices?

“Right now, refiners are the big winners,” Parent said.

They’re running close to capacity, demand is up because of lower gas prices and therefore refiners can charge more than usual.

If crude oil prices get even cheaper – potentially as sanctions against Iran end and more oil pours onto the world market – there’s no guarantee gas prices will follow because of the refining constraints in North America.

Just Posted

Surrey Mayor Linda Hepner bids farewell in tearful State of City Address

Outgoing mayor announces Director of Housing, looks back at Surrey’s evolution, and pokes fun at her ‘media missteps’

ZYTARUK: Hepner, to her credit, rose to the occasion

She could have used her last address to make political digs, pitches and slights. She did not.

Surrey woman’s ‘tell-all’ book meant to help those struggling with domestic violence

Second book details abusive marriage, how people failed her

Surrey district cop station closed by sewer backup

People seeking criminal records checks and other services can get help at any of the other stations

VIDEO: Messages of hope, encouragement line bars of B.C. bridge

WARNING: This story contains references to suicide and may not be appropriate for all audiences.

Trans Mountain completes Burrard Inlet spill exercise

Training required, some work continues on pipeline expansion

First court date for B.C. man accused of murdering Belgian tourist

Family and friends of Sean McKenzie, 27, filled the gallery for brief court appearance in Chilliwack

Pot, cash, mansions: Judge divvies up illegal estate of divorcing B.C. couple

The Smiths ran a multi-million marijuana operation that spanned three counties

‘Little Feet’ book documents B.C. woman’s horrific 2001 accident

Heather Williams has documented the two profound stages beforeand after the accident

Around the BCHL: Nanaimo Clippers acquire defenceman from Langley Rivermen

Around the BCHL is a look at goings on around the BCHL and the junior A world.

B.C. co-op develops tech to help prevent ODs, especially for alone users

Brave Technology has been awarded $200,000 in the Ohio Opioid Technology Challenge

Recent jump in U.S. butter imports? All smooth, says Canadian dairy farmers

U.S. farmers recently enjoyed extra access to the Canadian market

Potential replacements for Phoenix pay system to start testing soon: Brison

Testing of prototypes to replace troubled federal pay system will begin within weeks

Most Read