Low gas prices not all good news for the Okanagan

KELOWNA–The price of gas is on a steady decline throughout North America, and it’s no different in the Okanagan. At the end of May, regular gas hovered around a dollar fifty a litre in Kelowna.

These days, most stations are charging less than a dollar ten.

READ MORE: Will gas prices in B.C. drop even lower?

According to David Cram, a Professor at Okanagan College school of business, Saudi Arabia is refusing to hold back oil reserves historically used to balance the market in a downturn.

That’s resulted in a over-supply in the market.

Cram says that’s good news for drivers in the short term, but if it continues too long, even Kelowna’s economy will feel the pinch.

“Well, I think it will have a ripple effect through B.C.’s economy because we have local businesses that provide metal fabrication to the oil field, we have workers who travel to work in Fort McMurray, so in terms of employment, in terms of economic activity, it is going to have an impact on us,” says Cram.

But Cram adds that these low prices can’t last forever.  Eventually the market will even itself out – he just can’t say when.

“Until the Saudi’s agree to some production reductions, and higher cost producers in the U.S. and Canada start to pull some supplies out of the market. When that’s actually going to happen? If I knew that I’d take you to Vegas and we’d both be doing all right.“