Gas companies gave 'inconclusive or conflicting' reasons for 13 cents/L price gap: report
VICTORIA - The B.C. Utilities Commission issued a supplementary report Tuesday, upholding a previous conclusion that British Columbians are paying up to 13 cents/litre more for gas than others, despite gas companies putting forward explanations for the difference.
The follow-up report comes after a government-ordered review into how gas is priced in B.C.
That report found a mysterious 13 cents/litre premium on wholesale prices paid by B.C. drivers. Oil and gas companies disputed the findings, and were allowed to comment for a second report.
One of the topics canvassed was why B.C. motorists pay more. In submissions, Parkland, Suncor and Imperial disagreed with the 13-cent differential. Suncor argued the gap is lower.
The commission quoted the company’s argument as such: "Any remaining 'gap' that cannot be accounted for by the various cost factors that have been provided in evidence during the course of the Inquiry and the comment period can likely be explained by an importer’s overhead costs, profit, and other factors not submitted in evidence."
Parkland argued the methodology used by BCUC was flawed, while Imperial insisted the commission missed some costs.
The conclusion from the panel: while the submissions had validity, "the evidence is either inconclusive or conflicting."
That 13-cent differential in gas prices cost drivers about $490 million in one year, according to the commission’s report.
'Tail wagging the dog'
The report issued Tuesday also concluded pricing for B.C. was based on the most expensive five per cent of supply in the Pacific Northwest - a phenomenon the commission's chair called the "tail wagging the dog."
David Morton told CTV News the price of gas in B.C. is based on the most expensive supply, yet it makes up only five per cent of what's sold.
Morton added even if there was an increase in supply from Alberta, for instance, whether by rail or pipeline, it likely wouldn't reduce what you pay at the pump because of how gas is priced.
'Clearly something wrong'
In response to the report, Premier John Horgan told reporters, "Clearly there's something wrong with the gas market in British Columbia."
Horgan said he would bring the issue up with the prime minister and also hinted at action at the provincial level.
"We've got some ideas that we'll be bringing forward in the weeks ahead in the legislature," he added.
The Liberals accused the NDP of failing to follow through on relief Horgan had hinted at earlier this year.
"He promised relief for drivers in British Columbia six months ago, but we still have some of the highest gas prices and gas taxes in North America," said leader Andrew Wilkinson in a press release. "John Horgan said he had a 'range of options' to deal with gas prices but all we get is excuses."
A panel also concluded the unexplained difference raises questions about whether the gas market is truly competitive due to market concentration. A previous report by the same panel had concluded there was no collusion among suppliers.