Record-breaking gas prices in B.C. could keep climbing, experts say
Pump prices are closing in on $2 a litre in some parts of the province
The cost of gas on British Columbia's South Coast is hitting record highs and experts say the price at the pump is not likely to come down anytime soon.
Prices at many stations across Metro Vancouver hit 186.9 cents per litre this week, while some drivers in Greater Victoria are paying over $1.94 on Thursday.
Mark Jaccard, the director of the school of resource and environmental management at Simon Fraser University, said the current price surge toward $2 per litre is likely because of the war in Ukraine.
Russia accounts for about 10 per cent of global oil production. Now that many countries around the world have stopped buying their product, there's a shortage, driving up prices at the pump.
Prices are not just determined by supply but also by "fears and expectations," Jaccard noted — and wars, storms and transitioning economies all play a role in stoking that fear.
"They are rising everywhere in the world, not just in British Columbia," he said.
This is not only because countries are trying to avoid using Russian natural gas and oil right now, but because some countries, primarily in Europe, are trying to reduce their dependency on fossil fuels altogether, he added.
"The long-run effect is actually lower prices for oil but, for now, you could very well see higher prices for oil while you try to make that transition," Jaccard said.
Werner Antweiler, a business professor with the University of British Columbia, agreed the invasion of Ukraine is "really driving prices high."
He and Jaccard also agreed prices are likely to get worse — jumping well past $2 a litre — before they get better.
"As the situation in Ukraine is not looking promising ... we can expect the sanctions against Russia to start biting."
1-cent-per-litre tax increase still coming in April
But British Columbians who are seeing prices creep closer and closer to $2 a litre should not expect government intervention.
On Thursday, B.C. Premier John Horgan also attributed the price jump to the conflict overseas.
"People, when they look at almost $2 a litre for gasoline, they immediately say, 'How can we reduce this?' And taxation is a part of the increase — one cent — but [this kind of] increase overnight has everything to do with international instability and, of course, the events unfolding in Ukraine today," the premier said during a news conference.
He acknowledged calls to change the incoming one-cent-per-litre carbon tax increase arriving next month. The increase is part of a federal mandate, he noted, but is beneficial to B.C.
"It may be easy for politicians to declare that taxes are the problem. Those taxes go to building our roads, to providing the transit, to making sure the infrastructure is as ... having come through the atmospheric river this past fall, I think people understand better than in the past how fragile our infrastructure is and how important it is to make those investments."
Energy minister Bruce Ralston has also said B.C. will not cap the price at the pumps.
"For the government to step in to the private market and set prices and fix prices is a major major step and has unintended consequences," said Ralston. "The gas companies could turn around and dry up supply and drive prices even higher."
Ralston said the one-cent-per-litre carbon tax increase will go ahead as planned on April 1.