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Gas prices still soaring on Vancouver Island

VANCOUVER ISLAND, B.C. – Drivers in northern Vancouver Island and the Sunshine Coast are still feeling the pinch at the pump.

But it’s a different story in Metro Vancouver. senior analyst Dan McTeague said there is no discernible reason why prices are so high in those regions.

“This business of keeping prices as high as they are… is getting a little long in the tooth. That’s a 30 cent retail margin,” he said.

At one Surrey station, gas can be bought for a relatively bargain price of $1.26 per litre for regular unleaded.

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Compare that to Powell River where the price for regular unleaded is $1.59 per litre at six locations.

The cheapest gas in Port Hardy is $1.51 per litre. It’s $1.42 at the Courtenay Costo and $1.49 at several stations in Campbell River.

McTeague said it’s costing most gas stations either $1.20 or $1.21 to buy their fuel, including taxes. The difference between the $1.21 and $1.49 in many stations north of Nanaimo is 28 cents a litre. That is known as the retail margin.

The retail margin at stations in Courtenay and Campbell River is “more than double the norm,” McTeague said.

This is despite the exclusion of a transit tax in rural island communities.

McTeague said it’s been two weeks since prices on the mainland have been above 1.48 cents per litre.

“It’s the right time for prices to begin dropping more dramatically,” McTeague said.

“All things being considered equal, you should be paying no more than $1.36, not $1.49,” he said.

McTeague takes into account the two additional cents a litre it costs to barge across the Strait of Georgia and then drive it over to stations on northern Vancouver Island.

“I’m still looking at a differential in the price of some 24, 25 cents a litre, best case scenario,” he said. “It does require us to start to think about when these prices will start to fall.”

Back in April, the price sat at an all-time high of $1.70 a litre at some Metro Vancouver locations.

But gas prices dropped dramatically at stations in Metro Vancouver after supply picked up at refineries along the Pacific Coast from California to B.C.

At the same time, McTeague said markets are “in an absolute panic” over a potential drop-off in demand stemming from the U.S./China trade war.

“(With) recessions, people don’t have jobs, don’t buy gasoline and so the markets have reacted rather dramatically, dropping prices by 25 cents a litre in a period of just two weeks,” he said. “That period of time was over two weeks ago so that’s why I think these prices have the ability to come down and perhaps the sooner the better.”

He said it’s high time stations begin to drop those retail margins back to levels we’re accustomed to, which is roughly 13 cents a litre.

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