Vancouver drivers are feeling the financial pain at the pump as gas prices continue to hover around $1.70 a litre — an all-time high in the region.
The cost of gas is so expensive that residents in the Lower Mainland are driving across the border to fill up at the pump and save some cash.
The desperation for cheaper gas seems to also be reaching new levels. One
Metro Vancouver resident said a thief drilled into his gas tank to get at the fuel Sunday evening.
WATCH: When will there be relief at Metro Vancouver gas pumps?
Although the rest of Canada is also experiencing high prices at the pump, Metro Vancouver is the most expensive region, according to McTeague. And the exorbitant prices may only be a west coast headache, he added.
As of Friday, the lowest prices in the city was around $1.56 a litre and the highest prices hovered above $1.72 a litre.
Why so high?
Lack of supply
McTeague said B.C.’s high gas price has to do with a lack of supply across the west coast.
Because of low supply, the province has to find other sources for gas and compete with California and other west coast regions for gas refined in Washington state.
“It has to do with the Trans Mountain Pipeline too, it provides around 60 per cent of oil and gas in B.C. That pipeline is now at capacity and overloaded,” he said. “And the provinces does not have the infrastructure, it only has two small refineries. This is not a lot. B.C. is strangled with 67,000 barrels, meanwhile, Ontario has around 400,000.”
WATCH: Calgary energy expert explains impact of refinery capacity on gas price
B.C. only has two oil refineries, one in Prince George that produces about 12,000 barrels a day and one in Burnaby that produces about 55,000 barrels a day.
He explained that if the Trans Mountain Pipeline expansion were to flow to B.C., it could add 50,000 more barrels of oil a day — helping to offset the shortage.
“More refiners aren’t coming to B.C., but the pipeline expansion would represent another refinery,” he explained.
High taxes
But it’s not just a lack of supply; compared to the rest of Canada, B.C.’s gas taxes are the highest in the country.
READ MORE: Metro Vancouver record-high gas prices here to stay, analyst says
Almost 34 cents of every litre of gas purchased in Metro Vancouver goes to the province. That includes the 17-cent TransLink tax, two motor fuel taxes totalling 8.5 cents, and the 8.9-cent carbon tax.
Here is a breakdown of what the total looks like:
B.C. Premier John Horgan said the provincial government has very little to do with the pricing increases, pointing out that carbon tax increases under his government have only driven up prices by two cents in a little more than a year and a half.
Instead, the B.C. premier is pointing his finger at oil and gas companies. Horgan says the price of a barrel of oil has remained relatively stable while gas prices have gone up quickly.
“I’m as disappointed as other British Columbians when I see massive spikes in process with no rationale behind that. The carbon tax went up one penny on Monday. That does not reconcile with a 12 or 13 or 14-cent increase across the week,” Horgan said earlier in April.
“It’s not about governments gouging, it’s about gas companies gouging.”
WATCH: Fuel analyst predicts wild and bumpy ride for 2019 gas prices
Weak loonie
Canada’s weak loonie impacts the entire country, not just B.C. and it’s adding another four cents a litre at the pumps, McTeague said.
What about the rest of Canada?
McTeague believes the rest of Canada won’t see the high B.C. prices at the pump.
“The best prices in Canada are in Manitoba and Saskatchewan because the taxes are cheapest, it’s competitive to the rest of the country,” he said.
However, prices are still expected to rise from coast to coast as the summer driving season kicks off, he said.
“Demand is going up, crude oil is also up, we have a weak dollar and then there’s the federal carbon tax,” McTeague said, adding that he expects the high gas prices to stick around for a while.
— With files from Global News’ Richard Zussman
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