WATCH: It’s a familiar tale: Oil prices dropping, Metro Vancouver gas prices not. As John Hua reports, not surprisingly, the oil industry says there’s no shortage of reasons why we’re paying more.
Making a trip to the pump in Metro Vancouver has been pretty painful this summer.
Prices on Tuesday were around $1.39 per litre, only 11 cents less than the cost last year when the price of oil was twice as high.
The biggest reason, say analysts, is the weak Canadian dollar.
The weak dollar is making the cost of commodities that are priced in U.S. dollars – like gasoline – more expensive domestically than they would have been if the loonie was worth more.
“Although prices on oil may have dropped in the Unites States and there’s a bit of benefit for American drivers, not so much for Canadians,” said Dan McTeague, senior petroleum analyst for GasBuddy.com.
WATCH: Rising gas prices blamed on low dollar
There are a few other reasons for high prices at the pumps besides the slumping loonie.
But big oil firms that own their entire supply chains, from oil extraction to refining to distributing through their own retail stations, are also keeping retail gas prices elevated, experts say.
Big producers that also own stations such as Suncor and Imperial Oil Ltd. are hoping to offset the financial hit they’re taking from low oil prices by lifting prices at the pump.
Another factor is a reflection of basic economics. Experts point out that July is the busiest driving month of the year, and prices are rising to meet demand.
“We tend to pay a premium,” said McTeague. “If we want Americans to send us gas while there’s a supply crunch down there or a demand increase down there, Canadians are forced to pay a little bit more because we’ve painted ourselves into a corner. We don’t produce enough gas to meet our domestic needs.”
Earlier this month, several Shell gas stations in Edmonton were left bone dry due to maintenance work being done at their Scotford Refinery. Similar problems could continue into the summer.
Then there is the issue of taxes, which McTeague says can add up to well over 35 to 40 cents per litre for some drivers on B.C’s south coast.
Here is a breakdown of Vancouver gas tax rates, according to numbers from the BC Ministry of Finance.
-Base price: $1.04
-TransLink tax: 17 cents
-BCTFA tax: 6.75 cents
-B.C. motor fuel tax: 1.75 cents
-Carbon tax: 6.67 cents
-GST: +5 per cent tax
-With files from Jamie Sturgeon, John Hua and Caley Ramsey