When it comes to gas prices in Canada, what goes up doesn’t always come down.
The price of crude is collapsing to levels not seen since 2008, but the price British Columbians are paying at the pump is staying relatively steady. In some cases, prices are rising.
“There’s been a pretty meaningful gap between where oil prices are and where you’d think gas prices maybe should be,” BMO senior economist Benjamin Reitzes said.
Reitzes says the gas gap can partially be blamed on increased U.S. demand, the low loonie, and increased refining margins.
“The margins for gasoline retailers, for refiners may have widened a little bit. They might be making a little bit more money per litre of gasoline,” he said.
READ MORE: Canadians still paying up at the pump despite drop in oil prices
So where are gas prices supposed to be?
In Metro Vancouver, gas prices sit at around $1.20 per litre. If you take out taxes and other regional factors, the base price is closer to the national average price of $1 per litre.
But some analysts say the actual price of gas should be closer to 80 cents a litre.
A chart produced by Reitzes shows a clear disconnect between current pump prices in Canada and the price of oil, two commodities that – again clearly illustrated by the chart – have held a close relationship historically.
“Simply, consumers don’t appear to be reaping the full benefit of lower oil prices,” Reitzes said. “The chart suggests that gas prices should be well below $1.”
While there is room for prices to drop slightly across the country and other parts of B.C., petroleum analyst Dan McTeague of GasBuddy.com. says there are factors that keep prices up in Metro Vancouver.
Add in the recent stormy weather that stalled the flow of oil-carrying barges into the area, and there’s no shortage of reasons why many drivers are feeling shortchanged at the pumps.
-With files from John Hua and Jamie Sturgeon
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