Gas prices to fall in B.C. and Vancouver but only so far
While prices are dropping in Vancouver, they will remain amongst the highest in North America
The recent drop in gas prices in Vancouver is likely to continue but don't expect them to fall to the prices drivers are already paying in the rest of the country, according to one industry expert.
"You should be seeing prices coming down significantly over the short term," predicts Roger McKnight, the chief petroleum analyst for En-Pro International from his office in Oshawa.
McKnight says Metro Vancouver and B.C. are seeing gas prices drop now that some refineries south of the border are back online.
"In the Lower Mainland, Vancouver area, you really are influenced by the refining situation that's happening up and down the U.S. West Coast, from L.A. right up into Washington."
"There have been several refinery outages that have been prolonged for quite a while. But that seems to be coming back."
Indeed, on Friday in Vancouver many stations were already selling for his predicted price of $1.16.
According to the GasBuddy website the prices have been dropping since the start of the new year.
For a brief time one station on SW Marine drive was selling gas for $1.11, but it appeared to have raised its price later in the morning.
International factors influence price
McKnight says international events — such as the U.S. lifting its embargo on Iran and Obama deciding to lift the U.S. ban on exporting crude oil just before Christmas — are also playing a major roll, pushing down the price of crude oil.
"There is so much crude, they don't know what to do with it," he says.
But he cautions the price of gas is not tied directly to the falling price of crude oil, noting that while crude has fallen 38 per cent since July, gas only dropped 12 per cent.
He says that was because oil companies were passing on the cost of refining and exploration to consumers.
"They really have stuck it to everyone for those six months," he said. "But as of about Christmas Eve, those refining margins have been cut by 80 per cent in the West."
Vancouver to remain above national average
Nevertheless, the falling prices in the region still remain among the highest in North America.
And McKnight doubts Vancouver will see the gas prices already common in Alberta and other parts of the country, which have been well under a dollar for some time.
"Calgary I'm looking at 79 cent in the coming week. Toronto is already down to 93.9 (cents)."
Gas prices in B.C. tend to be higher than the rest of the country, in part, because of the province's carbon tax, while Metro Vancouver drivers pay even more, in part because of the transit tax.
Outside of Metro Vancouver in Abbotsford where TransLink taxes are not applied, gas is selling for as low as $1.05. The lowest prices in the province are found in Prince George, where drivers are paying $0.93.
But most drivers in the province are still paying more than the rest of Canada, where prices average about $0.97.
"Under a dollar would be tough. Montreal and Vancouver are in competition to see who has the most ridiculously complicated and highest tax structures for gasoline in North America."