Gas prices in Metro Vancouver are once again poised to shatter an all-time North American record, and analysts say geography and politics mean slim chances for long-term relief.
“Gas will be 239.9 on Thursday and that will smash an all-time record for any city in North America. That’s Vancouver,” said Dan McTeague, fuel analyst and president of Canadians for Affordable Energy.
“This will smash that record by three to four cents per litre.”
While Metro Vancouverites are shelling out record prices at the pumps, their countrymates in Toronto are paying somewhere in the ballpark of $1.49 per litre.
The difference means a 50-litre fill up in Toronto is more than $43 cheaper than in Vancouver.
That massive price difference is a result of the Lower Mainland relying on the U.S. west coast for the bulk of its supply, according to Paul Pasco, principal consultant with retail analytics platform Kalibrate.
“It’s a different supply chain and a different network that connects you, and you’re just a lot more closely tied to that west coast refining complex,” he said.
“The story you guys tell about what’s happening in Vancouver is the exact same story you can read about what’s going on in California.”
The entire west coast market is facing tightness of supply, a problem exacerbated by a lengthy maintenance shutdown at the Phillips 66 refinery in Ferndale, Wash., he said.
That has meant despite falling global crude prices, Metro Vancouverites haven’t seen a break at the gas bar.
“Vancouver sort of disconnected from the rest of Canada and has not followed the price of crude downward, and that is just the western seaboard, the supply is so tight that prices haven’t been able to come down and relax the same way they have across Canada,” he said.
Unlike Ontario and Alberta, British Columbia has also resisted cutting fuel taxes in an effort to offset prices.
It’s a decision the Canadian Taxpayers’ Federation (CTF) has targeted, arguing that as much as 75 cents of the price of a litre of gasoline is the product of varying taxes.
“Here in B.C. unfortunately we have the highest gas taxes not just in Canada but across North America,” CTF B.C. director Carson Binda said.
Those combined provincial, federal, carbon and transit taxes added about $20 to the cost to fill up an average mini van, he added.
“That’s the cost of a chicken and two jugs of milk at a time when we are struggling with affordability,” Binda said.
B.C. Energy Minister Bruce Ralston defended the province’s approach to gas taxes, noting that nothing about gas taxes have changed as prices have fluctuated.
Ralston said the province was alive to the effects of surging fuel prices on B.C. families, pointing to recent ICBC rebates and a planned increase to upcoming coming carbon tax refunds.
But at the end of the day, he said the taxes are working as intended.
“Both the carbon tax and the low-carbon fuel standard contribute to dramatically reducing emissions and encouraging innovation in the fuel sector,” Ralston said.
“So given our climate goals, which everyone shares after summers of heat domes, floods and wildfires, I think people appreciate that as well.”
Pasco said there may be some short-term relief on the way for drivers, with the Ferndale refinery expected to be back up and running by Thanksgiving.
But he said the structural pressures on the west coast market aren’t going anywhere, meaning more high prices come the new year.
It’s an analysis McTeague shared, adding international instability to the mix.
“Come November, December and January – look out,” he said.
“Heating oil, the problems in Europe, the fact they’re not getting any natural gas is going to put significant pressure on North American supplies, and that means the price is going to go up.”