Metro Vancouver gas prices north of $2 per litre appear to be here to stay for the foreseeable future, and businesses and consumers say they’re feeling the pinch.
The price at the pump topped $2.13 per litre on Sunday, the highest recorded so far in 2023.
While prices were down a few cents by Monday, the Surrey Board of Trade said sustained high prices are already having an impact.
“It is going to be impacting consumers in a significant way when they look at the prices of goods as well as the profit margins for businesses,” board of trade policy and research manager Jasroop Gosal said.
“In order for them to remain competitive, they have to compete on a global market, so they have to make sure they are able to supply goods at a reasonable rate.”
Gosal said the transport sector was getting hit hardest by prices, but said those effects will eventually be passed on to consumers.
He said the situation also risked driving both businesses and consumers out of the region, including south of the border.
Surrey Realtor Gurdeep Sahota is among those who’ve taken their business to Washington state.
He told Global News he makes at least one trip across the border a week to tank up and shop, estimating it’s saved him upwards of $5,000 in the last several years.
“For people who are hit with these high gas prices that adds up,” he said.
“That’s a lot of money. It would pay for a very nice vacation … Could pay for repair bills for your vehicles, could pay for your kids’ education.”
The culprit, according to the Canadian Taxpayers’ Federation, is taxes. In Metro Vancouver, a variety of taxes account for about 78 cents of the price per litre, according to B.C. director Carson Binda.
“That means when you do a 64-litre fill-up you are paying about $50 just in taxes, that’s more money than it costs to buy a chicken dinner with all the fixings for a family of four,” he said.
Petroleum industry analyst Dan McTeague said strong demand for fuel, combined with moves by Saudi Arabia and OPEC to curtail production, are keeping upward pressure on markets.
“You have a scenario globally where oil production is not meeting demand by at least a million and a half barrels a day,” he said.
“One thing is certain: demand globally is on the rise, supply is not.”
McTeague argued that economic instability rattling markets has actually held oil prices back from where they should be given the supply crunch, and that if the market corrects consumers could find themselves facing a “price shock.”
“Above $2 (per) litre is where we can expect to stay, and we could see prices move that much higher,” he said.
In the meantime, the Surrey Board of Trade is calling for governments at all levels to step in and provide relief for struggling businesses.
Gosal said businesses want to see the government cut red tape, and review both provincial and federal taxes.
“They need it now more than ever, and the pandemic impacts have significantly affected our business community, and now with inflation and a reduction in GDP we are truly feeling it in this economy,” he said.
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