A weekend price hike that brought many gas stations above $1.50 a litre is only the beginning, according to an analyst forecasting pumps to hit $1.60 in the next few weeks.
Two of the four refineries that typically supply the Lower Mainland are down for “spring maintenance,” but Gas Buddy's Dan McTeague says even after they’re back to full capacity, the price of gas will continue to rise.
“We're heading towards $1.60 a litre unless something dramatic should happen like a global recession,” said McTeague. “Otherwise, look for $1.60 to be the new normal for the next several months, at least until October or November."
McTeague points out the Parkland Refinery in Burnaby only produces 55,000 barrels a day, which is nowhere near what a region like Metro Vancouver needs to meet demand. With a California refinery going offline indefinitely Friday, combined with robust demand in the first place, American producers have plenty of domestic companies looking to snap up fuel, which is continuing to drive the price ever higher. He says occasionally, tankers will bring gasoline and diesel from Southeast Asia if supply is too tight from North American sources.
“Anyone who doesn't think restricting pipelines has an effect should look at the price [in Vancouver],” says McTeague, pointing to the limited supply of Alberta fuel coming via the decades-old Trans Mountain Pipeline. The proposed twinning of the pipeline has been mired in controversy and legal battles with supply not growing with the population.
“You're paying the highest prices of any city in North America, the higher taxes certainly don't help the situation," he added.
That’s a criticism he shares with the Canadian Taxpayers’ Federation, which points out not only are taxes a whopping 51 cents when gas is $1.60, but there’s another three cents coming this spring with a rise in the carbon tax and the TransLink tax.
“If we got rid of the B.C. carbon tax, got rid of the federal excise tax, and got rid of the GST, which is a tax on tax -- you'd save around 25 cents per litre," points out CTF spokesperson Kris Sims.
Sims calls more pipeline supply from Alberta a “win-win” because the cost of living has climbed so high, many families are having a tough time making ends meet, and while have to start making tough decisions to meet monthly budgets.
“Whenever we start hitting gas prices like this at $1.60 it's sad because families start having to cut things like their kids' swimming lessons because they can't afford that little bit of extra every single month," she said.
Because the hit to your wallet isn’t just at the pump: groceries, most consumer goods, air travel, even municipal vehicle fleets, are all hit by rising fuel costs, which are then passed on to consumers and taxpayers.
With the national average at $1.15 a litre and gas stations in Bellingham selling for around 95 cents per litre Canadian, McTeague says it comes down to regional challenges — namely supply issues.
“A number of factors are driving this and everyone can point fingers but the reality is as long as Vancouver continues to rely on and be forced to bring in additional supplies from other jurisdictions, you're going to continue to pay a pretty substantial premium."