Unexplained difference of 13 cents found in B.C. gas prices: inquiry
Published Friday, August 30, 2019 8:50AM PDT Last Updated Friday, August 30, 2019 6:17PM PDT
An inquiry into British Columbia's high gas prices has found an “unexplained” difference of 13 cents per litre between Metro Vancouver and Seattle.
Prices in southern B.C. are set according to prices in the Pacific Northwest of the United States because it is a nearby region and a similar price is considered justifiable.
However, the inquiry by the B.C. Utilities Commission found that even after accounting for transportation costs and higher B.C. fuel standards, Metro Vancouver drivers were still paying 13 cents more than those in Washington.
Commission CEO David Morton says there is no evidence to suggest there is collusion among retail operators nor is their evidence of cartel behaviour, but prices can be controlled by five refiner-marketers.
He says the wholesale market for gasoline in B.C. is not truly competitive because of high market concentration levels, high barriers to entry and their ability to influence prices.
The inquiry concluded that regulation could potentially reduce the wholesale or retail margins to what is justifiable in comparable jurisdictions and reduce price volatility, but further investigation is needed.
Premier John Horgan called for the inquiry in May when gas prices tipped over $1.70 per litre in parts of the province.
The commission was asked to look at the difference in refining and retail margins, and the factors that contribute to price fluctuations.
The panel says it also explored mechanisms that the province might use to moderate price fluctuations and increases.
“Across the province, but particular in Metro Vancouver and on Vancouver Island, people are alarmed at the rapid increase in the price at the pumps,” Horgan wrote in a letter to the commission in May.
“In March 2019, refining margins for Vancouver were more than double the Canadian average and higher than any other major city in North America. This suggests that the producers are realizing a significant additional profit margin for fuel sold in Metro Vancouver compared with other jurisdictions.”
The utilities commission regulates electricity and natural gas prices in the province.