Gas prices could break records in B.C. following sanctions on Russia

A car is fuelled up at a gas station in Vancouver, Wednesday, July 17, 2019. (Jonathan Hayward / THE CANADIAN PRESS)

Gas prices in British Columbia are expected to rise by as much as two cents in the coming days, largely due to sanctions placed on Russia.

With the price at the pump already high in the Vancouver region, it's possible the slight increase could break the record set earlier this month, when drivers had to pay 182.9 cents per litre for regular gas at some stations. 

Speaking to media Friday, B.C. Premier John Horgan warned the summer may be challenging.

"We all of course remember how we were rationing gasoline in December as a result of the atmospheric river and the compression of our supply and our inability to get product to market," he said at a news conference.

"British Columbians responded by understanding that rationing was a short-term solution to a complex problem. Now we go into international disruptions to supply chains that are going to have an impact to supply here in British Columbia."

He said he thinks residents of the province will be patient this time around because they understand the situation, adding the "good news" is that the B.C. Utilities Commission has been tasked with asking providers to give a reason when prices go up.

"We saw 14 cents a litre increase just a few weeks ago that had no connection whatsoever to government policy. It had every connection to the international commodity price," the Horgan said.

"But now the providers of gasoline have to prove that, that they're not just gouging because they see an opportunity, but they're increasing the cost of gasoline because of inputs that are out of their control."

Car owners in Quebec and Ontario are also expected to pay more, according to analysts who say tensions tied to Russia are contributing to the increase.

U.S. President Joe Biden said sanctions will take time to have an effect on the Russian economy, but oil and natural gas prices have already surged south of the border over concerns that Russia will intentionally slow the flow to Europe.

Sanctions were put in place against Russia after when the country invaded Ukraine, and some commodity prices are already soaring as a result.

This includes prices for crops including wheat, barley and soy, all of which are trading at record highs.

Having such an important player offline puts pressure on other producers.

"Ukraine is the breadbasket of Europe," said Dalhousie University's Sylvain Charlebois in an interview with CTV News.

"It produces a huge amount of wheat and corn in particular… You could see produce being impacted, bakery being impacted. Over the mid-term you could see meat being impacted because it's going to cost more to feed livestock."

Experts also expect to see higher prices for items like eggs and dairy down the line.

With files from The Associated Press