Soaring gas prices linked to B.C. land values, but part of retail margins still unexplained: report
VANCOUVER - A report analyzing gasoline prices in British Columbia says rising land costs and credit card processing fees may account for nearly the entire differential in retail margins observed between Vancouver and comparable areas up to the end of last year.
The report by Deetkten Group was posted online late Wednesday by the B.C. Utilities Commission, which is overseeing a public inquiry into sky-high gas prices in the province.
The consultant's report says Vancouver's gasoline retail margins, which are the difference between the wholesale price for fuel and the retail price less tax, "highly" correlates with local land values.
Credit card processing fees are applied as a percentage of a total transaction, meaning the fees will be higher in jurisdictions like Vancouver where prices at the pump are already high.
But even after those factors are taken into account, more than one cent per litre in the retail margins remains unexplained.
The report says transportation and regulatory costs may account for higher wholesale gasoline prices in B.C. cities, but even estimating those costs at their highest potential does not explain the full wholesale price differences.