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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

White Rock Playhouse, Bell Centre lit up red in support of entertainment workers

Facilities across Canada participated in national Light Up Live movement on Sept. 22

Unofficial holidays: Here’s what people are celebrating for the week of Sept. 27 to Oct. 3

World Farm Animals Day, Drink Beer Day and Virus Appreciation Day are all coming up this week

UPDATED: Surrey RCMP make multiple arrests after reports of fight in Newton

Huge police response to reports of fight, possibly a gun, in the area of 82nd Avenue east of Scott Road

Fraser Health lists COVID-19 exposures at two more Surrey schools

Fraser Health has created a new webpage listing COVID-19 cases in schools

Surrey youth protest throne speech as part of Global Day of Action

Group marched to Liberal MP Randeep Sarai’s constituency office

B.C. records 98 more COVID-19 cases, most in Lower Mainland

One new senior home outbreak, Surrey Memorial outbreak over

VIDEO: COVID won’t dampen Lower Mainland woman’s Halloween spirit

Langley’s Tanya Reid posted video offering suggestions of how trick-or-treating might look for her

PHOTOS: 2nd calf in a month confirmed among Southern Resident killer whale pod

Center for Whale Research said they will eagerly await to observe the calf to evaluate its health

97 distressed horses, cats and dogs seized from farm in Princeton

RCMP assisted as BC SPCA executed search warrant

$250K reward offered as investigation continues into Sea to Sky Gondola vandalism

Police also asking for specific footage of Sea to Sky highway around time of incident

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Trudeau ‘disappointed’ by RCMP treatment of Sikh officers over mask issue

World Sikh Organization of Canada said taking Sikh officers off the front lines constitutes discrimination

Liberals reach deal with NDP on COVID-19 aid bill, likely averting election

NDP and the Liberals have reached an agreement on COVID-19 sick-leave

VIDEO: Mounties looking to catch Chilliwack bike-riding teen groper

Man caught on video slapping the backside of girl near CSS riding a bicycle

Most Read