British Columbia gas prices set to hit record highs this weekend – BC News – .

British Columbia gas prices set to hit record highs this weekend – BC News – .

Gasoline prices in British Columbia are once again on their way to breaking summer records, and about 60,000 drivers in British Columbia don’t give a damn.

That’s the number of British Columbians who now drive electric vehicles, according to a recent estimate.

Vancouver drivers can expect to pay $ 1.70 a liter for gasoline as of Friday, predicts Dan McTeague, president of Canadians for Affordable Energy. The last record set in Vancouver was in the summer of 2019, when gasoline prices hit $ 1.72 per liter. Vancouver gas stations are already in the $ 1.66 range.

Drivers in the interior of British Columbia have the luxury of avoiding some of the taxes Lower Mainland drivers face, but the price at the pump is going up here too.

A liter of gasoline currently sells for $ 1.43 in Kelowna, $ 1.45 in Penticton and $ 1.42 in Vernon. In Kamloops, with the exception of Costco which sells for $ 1.35, most stations sell for $ 1.43.

The same market forces are at play in the interior of British Columbia and the Lower Mainland, which means that a liter of gasoline in Kelowna could soon sell for close to $ 1.50.

And that could be the new normal, he said, in part due to the fact that the United States is no longer independent from oil and has to import oil again, which could mean high and sustained oil prices. .

Last summer, no one complained about high gasoline prices because oil prices had collapsed and demand was so low – because so few people were driving – that gasoline prices had collapsed. gasoline in Vancouver actually fell below $ 1 a liter.

But now that the pandemic is fading, summer travel begins.

In part, what is driving gas prices up in North America is the convergence of reopening economies, which means more people are driving and lower oil production. Additionally, a Phillips 66 refinery in Washington state has a declining unit, contributing to recent price spikes in the Pacific Northwest, McTeague said.

A global pandemic caused a sudden drop in demand for oil in 2020, which led to North American oil producers to cut production. Demand for oil is now exceeding current production levels and will remain so for some time, McTeague believes.

U.S. shale producers have cut production so much that in May of this year the United States imported 22 million barrels of oil from Russia, McTeague said. Currently, the benchmark price for West Texas Intermediate (WTI) oil is US $ 73 per barrel, about double what it was a year ago.

U.S. Energy Information Administration (EIA) estimates U.S. oil imports to increase 62% by 2022, due to loss of U.S. production

Gasoline prices are rising across North America, but as usual, they are highest in Vancouver.

Convinced that suppliers are deliberately defrauding Vancouver with high wholesale prices, the NDP government asked the BC Utilities Commission (BCUC) to investigate.

The BCUC investigation was not conclusive enough to explain a price difference of $ 0.13 per liter in wholesale prices in British Columbia compared to other parts of Canada. He said the difference was unexplained, but speculated that it was the result of an uncompetitive market.

The BCUC had been ordered not to examine provincial policies, such as tax rates or its low-carbon fuel standard, which could contribute to the disproportionate rise in gasoline prices in British Columbia.

The Canadian Taxpayers Federation has set out to examine the role that taxes and other policies, such as low-carbon fuel standards, play in gasoline prices in Canada.

It calculates that drivers in Metro Vancouver pay $ 0.68 per liter in various fuel taxes, including a transit tax, with the rest of British Columbians paying $ 0.54 per liter and Victorians $ 0.61 per liter.

“If drivers rant about the price of gasoline, they should know that about 68 cents of that price at the pump is tax in Metro Vancouver,” said Kris Sims, director of the Canadian Taxpayers Federation for British Columbia, in a press release.

“Prime Minister John Horgan, Prime Minister Justin Trudeau and Federal Conservative Leader Erin O’Toole all want high fuel taxes, and it will get worse if we don’t tell them to stop.

The federation includes O’Toole in its criticisms because the federal Conservative leader recently said that a Conservative government would implement its own version of carbon pricing.

And it is the carbon taxes that the federation has particularly pointed out in its criticism of the high taxes that Canadians pay on gasoline.

The federation says BC’s carbon tax adds $ 0.10 a liter to gasoline, and says the provincial standard on low-carbon fuels – which requires fuel suppliers to add certain percentages from renewable fuels to gasoline – adds about $ 0.14 per liter to the price at the pump in British Columbia.

“Together, BC’s two carbon taxes cost about 24 cents per liter of gasoline,” the federation said.

It should be noted that Europeans pay much higher prices and taxes for gasoline and diesel than Canadians, although most European countries are not major oil producers, while Canada is the fifth largest. largest oil producer in the world.

Once a new federal clean fuel standard takes effect and federal carbon pricing begins to match that of British Columbia, McTeague expects gasoline prices in other parts of Canada are starting to catch up with prices in British Columbia.

But taxes and fuel standards aren’t the only causes of high oil and gasoline prices. McTeague believes a new era of high and sustained oil prices has begun and will not end anytime soon.

This is because so much oil production by US shale oil producers has been lost. And it may never be invented.

The pandemic may have prompted U.S. shale producers to cut production and cut investment in new wells, but the move to divest from fossil fuels is now succeeding in making it harder for oil producers to raise capital for fund a new production, McTeague said.

This is good news for Russia, Saudi Arabia and other major oil-producing countries, but less so for North Americans, whose only choice to escape high gas prices will be to switch to vehicles. electric.


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