British Columbia

B.C. premier calls for independent investigation into high gas prices

B.C. Premier John Horgan has asked the B.C. Utilities Commission if it will consider investigating why gas prices in the province have soared in comparison to the rest of the country.

Inquiry would include asking oil companies to explain prices, premier writes in letter to BCUC

B.C. Premier John Horgan at the B.C. legislature in Victoria on Tuesday, after sending a letter to the B.C. Utilities Commission following a phone call with the prime minister about gas prices. (Michael McArthur/CBC)

After being politically hammered over the issue for weeks, B.C. Premier John Horgan has asked the B.C. Utilities Commission (BCUC) if the body will consider investigating why gas prices in the province have soared in comparison to the rest of the country.

In a letter sent to the regulator on Tuesday, Horgan said British Columbians — particularly those in Metro Vancouver and on Vancouver Island — are used to higher gas prices compared to other provinces, but not to this extent.

Gas prices have been hovering around a record-high of $1.70 in Metro Vancouver since mid-April.

"What British Columbians do not understand and cannot accept is a situation where the price of gasoline, correcting for differences in tax rates, gets increasingly out of line with the prices in the rest of Canada," Horgan wrote.

Opposition Leader Andrew Wilkinson has made gas prices a wedge issue since they shot higher last month, funneling public exasperation in the premier's direction.

A massive billboard emblazoned with "Blame John Horgan," paid for by a budgeted Legislative Assembly fund, has been put up next to the Alex Fraser Bridge on Highway 91 in Delta — a major thoroughfare for commuters in Metro Vancouver.

Anti-John Horgan billboard is pictured at the south end of the Alex Fraser bridge in Delta, British Columbia on Monday, April 29, 2019. (Ben Nelms/CBC)

Wilkinson said "a good chunk" of the reason for high prices is provincial taxation, though Horgan insists prices have gone up despite there being no change in tax rates.

There are a slew of reasons why gas prices are high in B.C.

The province grapples with a limited supply: there are only two oil refineries provincewide. To make up the difference, the government brings in petroleum from Alberta through the Trans Mountain pipeline or from other countries, including the U.S.

Other factors — such as global markets, time of year and the strength of the Canadian dollar — also affect the price. There are also more than half a dozen taxes on gas, amounting to 60 cents a litre for drivers in Metro Vancouver.

But Horgan said the gap between B.C.'s prices and those in other provinces is still too wide, despite those factors.

Gas prices at a station at Main Street and East 41st Street in Vancouver hit $1.72 per litre of regular on April 23. (Gian-Paolo Mendoza/CBC)

He said refining margins in the City of Vancouver, for example, are also "more than double" the Canadian average.

"This suggests that the producers are realizing a significant additional profit margin to fuel sold in Metro Vancouver compared to other jurisdictions. This is not acceptable and British Columbians want answers," the premier wrote.

Horgan asked the commission to investigate the gap, saying such a probe would include asking oil companies "to explain their prices."

A statement from the premier's office said Horgan spoke with Prime Minister Justin Trudeau over the phone on Monday. It said Horgan mentioned gas prices and that Trudeau said he "will be asking his officials to look at what can be done."

"We had a candid discussion. I laid out for him my concerns about the inordinate spike in retail gas prices … it just seemed to be, in my opinion, gouging," Horgan told reporters at the B.C. Legislature on Tuesday.

"He concluded he would ask his officials to take a look at it."

Gas prices in B.C.'s Lower Mainland hit all-time highs in April 2019. (Evan Mitsui/CBC)

The premier said he wanted to wait to speak to the prime minister before sending his letter to the BCUC.

The BCUC is an independent agency which regulates rates and service quality for B.C.'s electricity and natural gas utilities.

With files from Tanya Fletcher and Rhianna Schmunk

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.