Op/Ed: Time for BC to regulate gas prices, end gouging by oil companies says CCPA economist
It’s time for BC to follow the Maritime provinces and regulate gas prices to end gouging that has caused gas prices in Metro Vancouver to skyrocket, says a senior economist with the Canadian Centre for Policy Alternatives BC Office.
“It’s not taxes that are causing the current pain at the pump, it’s industry gouging,” says Marc Lee. “Alberta’s oil industry is making huge excess profits at the expense of Metro Vancouver drivers.”
Lee’s research, released today, finds that almost 90 per cent of the 55-cent-per-litre increase in prices since April 2016 is from higher crude oil prices, higher profits going to refineries and higher mark-ups taken by gas retailers.
“Higher crude oil prices are embedded in the price at the pump,” says Lee. “This is pure profit for oil producers whose production costs have not changed. Refiners are also raking in excess profits and refining margins being charged for gas in Metro Vancouver have spiked in recent years and are much higher than in other Canadian cities, which makes no sense.”
Lee says BC drivers are being gouged by big Alberta-based oil companies that are charging higher prices because they can get away with it, which is why the CCPA is calling for regulation.
“They pretty much use any excuse — like routine maintenance or bad weather — to increase prices at the pump,” he explains. “Vancouver drivers are paying 20-30 cents more per litre to refiners alone. This translates into an extra $500 to $750 million per year flowing from Metro Vancouver drivers for gasoline.”
All of Canada’s Maritime provinces regulate the maximum price of gasoline at the pump. April gas prices (excluding taxes) in Halifax are about 30 cents per litre cheaper than in Vancouver.
The BC Utilities Commission already regulates electricity and natural gas prices and its mandate should be extended to gasoline and diesel, Lee says, noting that regulation would tame the synchronized weekly up-and-down swings of gas prices in Metro Vancouver.
“Some politicians have suggested that BC should cut its fuel and carbon taxes to alleviate pain at the pump, but cutting taxes would only reward companies, transferring income from the public to the oil industry.”
BC’s opposition to the Trans Mountain pipeline expansion is not causing prices to spike, as claimed by Alberta Premier-elect Jason Kenney and BC’s Liberal Party, Lee says. He notes there isn’t a supply shortage of gasoline in Metro Vancouver and no vehicles have been turned away from a station because it ran out of gas and storage tanks exist to manage fuel inventories.
“There are only four major refiners that supply BC with fuel and with no other competition they’re gouging consumers because they can,” says Lee. “It shouldn’t be difficult for these companies to supply fuel at comparable prices as in other parts of Canada and if they don’t, the BC government should step in and regulate the market.”
The current price spike is a wake-up call for the need to reduce our dependency on gas. Greater public transit infrastructure and service hours along with a switch to electric vehicles is key, Lee says.
“We need to make it easier for people to get around without relying on cars or fossil fuels.”