Gas now about $40 more for a 50-litre fill in Metro Vancouver compared to Toronto

After gas prices in Metro Vancouver shot up 20 per cent in the past week, to $2.34 a litre, local drivers are paying around 85 cents more per litre, or about $40 for an average fill, than drivers in Toronto.

The recent spike in prices is being blamed on a once-in-five-years shutdown of a Washington state refinery and the fact that drivers are continuing to gas up in the nice weather, said Vijay Muralidharan, an energy economist in Calgary.

“Prices have to go up to match demand,” he said.

He predicted that high prices will remain for another month or so, until the usual seasonal slowdown in fuel consumption.

The Washington refinery that supplies Canadian wholesalers shuts down for every fall for its yearly maintenance, normally for about two weeks. But this year, it has shut down for a more intensive maintenance that will take a month, Muralidharan said.   

Even before the latest spike, Metro Vancouver faced the highest pump prices in North America.

Toronto drivers on Monday were paying about $1.49 per litre for regular gasoline, Edmonton $1.40, Calgary $1.49, Winnipeg $1.63, St. John’s, Nfld, $1.65, Kelowna $1.69, and Kamloops $1.77, according to the Gas Wizard website.

B.C. relies heavily on imported gas, a supply for the Metro Vancouver area that comes from the U.S. west coast, which has the highest gas prices in that country, according to Muralidharan.

The U.S. is divided into five petroleum administration for defence districts, or PADDs. PADD5, which makes up Washington, Oregon, California, Nevada, Arizona, Alaska and Hawaii, relies on imports from OPEC countries, and its base cost is driven higher because of stringent carbon neutral policies in those states, he said.

States and provinces that rely on the other four PADDs pay less for their base oil price because they have greater access to more oil, he said.

The AAA in its daily pricing of average oil prices by state show the highest retail prices for the PADD5 states, as well as adjourning states of Idaho and Utah, were the equivalent of around $1.50 to $2 Cdn per litre. The average for Washington state on Monday was $1.77 a litre, and California $2.08 a litre.

The Canada-adjacent states of New York, Vermont and Maine had average retail prices of $1.29 to $1.34 on Monday, according to the AAA.

Muralidharan said gas costs more in western states with “stringent” carbon-neutral legislation because of the cost of adding to the gas a “blend of bio fuels to reduce the carbon intensity.”

And the four main contributing factors to oil prices in descending order are crude prices, taxes (which make up across Canada on average 50 cents a litre, with an additional 10 cents per litre in Metro Vancouver because of regional taxes), refinery margins, and retail marketing margins, said Muralidharan.

He said the annual maintenance shutdown of refineries, mandated by federal regulators, affects the price of B.C. gas more than the price in other provinces because of the limited access to gas. Muralidharan also said anyone who thinks that refineries shut down periodically to limit supply and drive up prices don’t know how gas pricing works.

Prices should drop in November because of a seasonal decline in demand for fuel, but the continuing invasion of Ukraine by Russia, the world’s second-largest producer of oil, has made it difficult to predict how the war will impact supply and demand, and therefore prices.

He said his guess is that prices in B.C. will remain between $1.80 and $2.10 until at least the new year.

slazaruk@postmedia.com

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