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Supply challenges, taxes, weak loonie means price at pump continues to soar

VANCOUVER ISLAND, B.C. – Don’t expect any relief at the pump anytime soon.

This is despite B.C. premier John Horgan calling for an independent investigation into provincial gas prices, which have skyrocketed over the past two months.

The independent B.C. Utilities Commission is investigating the matter.

However, senior petroleum analyst Dan McTeague maintained that “chronic supply challenges” on Vancouver Island and the Lower Mainland are driving up the prices.

“I think it’s a colossal stalling tactic,” McTeague said, about the premier’s call for an investigation.

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“His commentary about gauging is not the case, at all. In their own conclusions, they see that there’s no sign that there’s a non-competitive, or unfair business practice leading to higher margins. He’s basically trying to re-invent the wheel, here, and have another department come up with the same opinion.”

McTeague noted that is not in the business of taking political sides, however, “Our view is very simple. These are the facts. We’ve talked about a shortage here in the mainland and on Vancouver Island for two weeks, two months, two years, now, and nothing has changed.”

He also mentioned a “boutique fuel standard” called the low carbon emissions fuel mandate, designed to reduce B.C. drivers’ reliance on non-renewable fuels.

“And while it may not be apparent to most, the fact is, you don’t produce enough gasoline in your backyard – less than a third of what you need. So you’re asking Alberta and you’re asking Washington State and even the importers from other regions around the world, to make you a fuel standard that you, yourself, cannot produce in significant volumes,” McTeague said.

Meanwhile, McTeague said “oil has become far more popular simply because Alberta curtailment has driven the price up from $15 a barrel to $50 a barrel in a very short period of time.”

At $1.68.9 per litre for regular unleaded at some stations, gas prices in the Lower Mainland are a whopping 43 cents higher than they are in Toronto.

With prices at $1.67.9 in Port Hardy, $1.64.9 in Powell River, $1.59.9 in Sechelt, $1.57.9 in Courtenay, and $1.52.9 in Campbell River, drivers on Vancouver Island and the Sunshine Coast have been feeling the pain at the pumps, as well.

McTeague had said earlier this week that there was a possibility that price could edge one or two cents lower.

But with a weak Canadian dollar, along with provincial, federal, and carbon taxes and a dearth of supply, he said, “You have an unlikelihood of any change in the next little while.”

(On Vancouver Island, outside of Victoria, total gas taxes equate to roughly 40 cents a litre, while in Victoria, it’s 48.5 cents per litre, and in Vancouver, it’s 52.5 per litre).

“The situation south of the border continues to be pretty questionable,” he added. “They are not producing enough gasoline yet to meet their own needs, especially in California and they’re having to import gasoline from all sorts of places around the world, including Newfoundland. So I’m loath to say that the prices should drop.”

He said that looked to be the case earlier this week but since then, he said, “there has been no corresponding movement at the pumps in California or among wholesalers as far as the Pacific Northwest prices are concerned.”

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