A report from the B.C. Utilities Commission has found a unexpained 13-cent difference in the wholesale price of gas between Metro Vancouver and the Pacific Northwest.
The commission released the report last week after B.C. premier John Horgan ordered an inquiry to determine why gas prices are higher in the province than in other jurisdictions.
The unexplainable price difference, averaged out across the province at 10 cents per litre, works out to an extra cost of $490 million for B.C. consumers.
“People feel like they’re being ripped off when they fill up at the gas station,” said Bruce Ralston, the Minister of Jobs, Trade and Technology. “And they’re right.”
“Today, the BC Utilities Commission found that the wholesale gasoline market is not truly competitive, which results in unexplained higher gas prices for consumers, and potentially higher profits for oil and gas companies.”
READ: B.C. gasoline prices higher but reason not clear, inquiry finds
Wholesale fuel is provided by four companies that provide 90 per cent of the gas and while the commission did not find any collusion, it noted that the market is an oligopoly.
The report also noted that if B.C. had to replace refined fuel currently supplied by the Trans Mountain pipeline, there would be inadequate infrastructure to transport and distribute fuel from any market other than Alberta.
Kootenay East MLA Tom Shypitka acknowledged the findings of the report, but criticized the fact that it didn’t consider the effect that the governments economic or fiscal policies — such as carbon pricing — may have on gas prices.
“I think the elephant in the room and what everyone has been saying, is it’s our fiscal policy,” Shypitka said. “It’s our competitiveness within the province that puts us at a disadvantage for things like this on pricing for fuel.
“What was really disappointing about the report was it was a report to bring on another report. We’re going to have to dig deeper — it’s something we said right from the start — how does our fiscal policy affect gas pricing?”
“…The fact that Horgan eliminated or made the terms of reference exclude taxation and fiscal policy was ridiculous.”
The BCUC report suggested exploring price regulation as a next step, similar to what currently exists in the Maritime provinces and Quebec. Other recommendations for examination include opening up terminal infrastructure and ensuring more transportation and distribution infrastructure for refined flow.
There are two refineries in B.C. that account for approximately 30 per cent of all refined fuel in the province, while the rest is imported.
The inquiry included submissions from intervenors such as Super Save Group, Parkland Fuel Corporation, Husky Energy, Shell Canada Limited, Suncor Energy, National Energy Board, Imperial Oil Limited and more.
Gas in Cranbrook and Kimberley is currently priced at $1.24/L, while Fernie is up slightly at $1.29/L.
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