Lower Mainland gas price dip of 15 cents in 48 hours 'unprecedented,' says analyst
Oil industry observer predicts gas prices will fall to $1.30 per litre
Gas prices dropped an unprecedented 15 cents in two days this week at Metro Vancouver pumps, according to price watchers.
Oil industry analysts predict that the price of a litre of gas in parts of the Lower Mainland, now hovering around $1.35 per litre, will fall even further to $1.30 by Friday night.
"It's historical. I've never seen this before," said Dan McTeague of Gas Price Wizard, referring to the 48-hour free fall.
He said the dramatic price drop was due to a surplus of fuel in the Pacific Northwest. Some refineries that were offline for repairs are now back producing.
McTeague said that an initial 10 cent drop in price on Thursday was also the lowest dip in the dollar value of fuel in the past decade in southwestern B.C.
Gas prices in Metro Vancouver hit record level prices in April at $1.70 per litre at some stations.
Philip Verleger, a Colorado-based energy industry economist, says shifting world markets may drive the cost of gasoline even lower.
He says a flood of crude oil is now hitting world markets because of fears that environmental concerns and the rise of electric vehicles could limit oil sales in the future
"The oil industry right now is under attack from environmentalists and, given global warming, there is a huge uncertainty in the industry as to how much oil will be consumed five years from now or ten years from now," he said.
He described oil companies and refineries as "nervous."
Verleger said oil producing countries — from Saudi Arabia to Brazil — are working hard to sell the oil to refineries as environmental concerns dominate political agendas and threaten the future of the oil industry.
"The scene is changing so rapidly that all these guys [oil producers] are very nervous. Everybody in the business understands that a lot of the oil reserves will never get produced," said Verleger.
The New Car Dealers Association of British Columbia estimates that about five per cent of all vehicles in the province are electric, but incentives from governments are fuelling more purchases.
Verleger says a glut of oil is expected to be dumped on international markets as producers try to sell product now rather than into future markets that are expected to weaken. Verleger predicts that will drive crude prices down with lower gas prices following.