As the summer driving and road trip season ramps up, so is a review into why B.C. gas prices are smashing records, but a look at government policy and taxes isn’t going to be part of that.
The province unveiled the terms of reference for an inquiry by the B.C. Utilities Commission. The energy regulator agreed to look into the issue after a request by Premier John Horgan.
The terms of reference state the commission will look at the factors influencing retail and wholesale gas and diesel prices since 2015, if refining margins are different from other jurisdictions in the country, why that is, and a review of what measures the province could take to help manage prices. In a statement the Premier also said the terms were broad so the commission could look into issues like price fixing and price gouging to see if those were factors at play.
The terms also specify that the commission “may not inquire into the effects of Provincial enactments or policy on gasoline and diesel prices in British Columbia.” That, says energy analyst and lawyer David Austin, means provincial fuel taxes won’t be part of the analysis.
“Cutting the taxes on gasoline, which is the only thing you could do in short term to reduce it, if those taxes are cut the government's revenues are cut,” Austin told CTV News. Adding a reduction in revenue could also impact programs or other policies.
The B.C. Liberals attacked the Premier in Question Period along with a billboard and mailout, saying the way to reduce pain at the pump is to reduce taxes.
“It’s convenient for the B.C. Liberals and Andrew Wilkinson to worry about the one cent and not the 39 cents gas companies have raised prices without any explanation,” said Ravi Kahlon, the MLA for Delta North. He added he thought people were fed up and wanted answers about why prices are so high. The report from the commission is due Aug. 30, although that timeline could be extended.
Austin believes ultimately the issue of gas prices, comes back to market forces. He thinks the review probably won’t accomplish much.
“What's going on now is the demand for gasoline is relatively high as compared to the supply coming from refineries,” Austin added.
He also suggests anyone thinking a new refinery could be a solution is probably not looking at the economic argument at play.
“Nobody is going to go out and build a new refinery costing more than a billion dollars because you're now hearing about electric vehicles,” he noted.
The province has outlined a plan by 2040 to phase out gas and diesel powered vehicles in favour of electric ones. As for beefing up supply in the short-term, he says if there was money to be made by bringing in more rail cars full of fuel that would probably already be happening.
The BC Utilities Commission said it is reviewing the final terms of reference that it will be “establishing a fair, transparent and independent inquiry process.” More information is expected on the process in the coming days.
