The BC Utilities Commission has released its inquiry into B.C. gas prices.
It says there is no evidence of collusion among gas retailers, but says there are also unexplained differences in wholesale price margins in southern B.C. compared to the Pacific Northwest, namely Washington State.
The report says “retail margins in Kamloops follow the trend in the Western Canada region quite closely, while Vancouver appears to have outpaced the growth in retail margin in Western Canada starting around 2015.”
The difference this year in Vancouver gas prices is an extra 13 cents per litre compared to the PNW. In Kamloops, the report says the wholesale gas price is six cents per litre higher than Edmonton with no clear reason why.
With an average 10-cent-per-litre price difference across B.C. compared to other regions, the BCUC says consumers in the province pay $490 million more per year for gasoline than they would if prices were in line with other areas.
The inquiry did not include taxes applied to gasoline and only investigated the portion of the price that does not include prices, as BCUC chair and CEO David Morton explained to reporters today.
The report came after the Horgan government asked the BCUC back in May to investigate potential price gouging by gas retailers in the province.
In a statement, Minister of Jobs Bruce Ralston points out the commission also says in its report that the market for wholesale gasoline in B.C. is “not truly competitive,” and he says the government is concerned with a lack of transparency in how gas prices are set.
When asked why the inquiry couldn’t look at government taxes and policy, Ralston says “it’s no secret” how much consumers are taxed at the pump, saying that is public information.
Meanwhile, a senior petroleum analyst says the “unexplained difference” in gas prices in B.C. is government policy.
Dan McTeague says B.C. has a policy for producers to comply with a low-carbon fuel regulation which adds anywhere between eight-to-15 per cents per litre extra for gasoline.
“The reality is the main differential in prices has much to do with the fact you are paying a higher price for fuel because you have a higher standard. You have a boutique, premium fuel, which is part of the low-carbon regulations. And those cost most distributors a lot more money to produce,” McTeague says.
“Alberta doesn’t have that, and certainly Washington state doesn’t have that. And that explains the mystery 13 cents. Unfortunately utilities can’t come to that conclusion, because the Horgan government prevented them from looking at government policy and taxation.”
Watch this story for updates as the day progresses.
