The continued jump in gas prices in the Lower Mainland is completely mystifying.
There was a brief window in January when prices at the pump in Langley fell below $1 per litre, coming at least a little closer to prices in other parts of North America. The taxes on gas in the Metro Vancouver area are very high — largely due to the 17 cents per litre that TransLink takes — but it seemed gas prices were finally starting to reflect low world oil prices.
Oil prices have gone up a little bit since that time, but not significantly. On Monday, the price of crude oil was under $49.50 (U.S.) per barrel — down by close to 50 per cent from the highs of last year.
The retail gas prices in the Lower Mainland right now seem to have little connection to world oil prices.,
After they fell below $1 per litre, they went up to $1.03, then $1.06, then $1.11, then $1.16 and, as of Monday, they sat at $1.21.9.
Meanwhile, in Edmonton, the price for a litre of gas is 84 cents. In all areas of Western Canada, outside B.C., it is less than $1 per litre.
In Bellingham, where gas prices are very relevant, as they often act as a magnet for cross-border shoppers, the price per litre in Canadian dollars on Monday was 78 cents. That’s 44 cents less — more than one-third cheaper.
The flow of cross-border shoppers has delined steadily as the Canadian dollar has fallen. The fall of course is due partially to falling oil prices.
Yet if the differential between gasoline prices in Metro Vancouver and Whatcom County continues to grow, there may well be another increase in cross-border shopping.
People may again decide to make the trek to the U.S. That of course punishes retailers in Canada, particularly those who are located in areas close to the border like Langley.
I have been unable to find any explanation as to why gas prices here continue to rise, particularly in light of the prices in almost every other area of the continent.
Most of the gasoline consumed in Metro Vancouver comes from refineries in Alberta and northwest Washington, although the Chevron refinery in Burnaby does supply a significant amount of fuel.
There have been no new taxes added. The exchange rate, due to the lower Canadian dollar, does add a little bit to the price, but there is no way it is responsible for a 20 per cent increase in the price in one month.
It’s hard not to come to the conclusion that the big gas retailers, who in effect set the price by matching each other, have concluded that Lower Mainland drivers aren’t paying close attention to what is going on with oil prices, and won’t notice if the price creep continues on a day-by-day basis.
If people in this part of the world all had wallets full of cash, the gas retailers might be on to something. However, the heavily-taxed residents of this area, who pay sky-high prices for housing and are being hit with added government service fees, deserve to get a break at the pumps.
