Vancouver Gasoline Nears $5 a Gallon, Tops in North America
(Bloomberg) -- Vancouver sits less than 750 miles from the Canadian oil sands but it may as well be on another continent for vehicle drivers.
Gasoline prices in the Pacific Coast city hit C$1.62 a liter ($4.77 a gallon) on Monday, the highest in North America, according to Dan McTeague, a senior petroleum analyst at GasBuddy, which collects real-time fuel prices from more than 140,000 gas stations on the continent. And there’s little sign of reprieve with a weaker currency, limited refinery supplies, and a new carbon price behind the surge.
Vancouverites are paying about a third more than drivers in Honolulu, and more than in the Cayman Islands, which doesn’t have a single refinery and imports fuel on barges. More, in fact, than any other major oil-producing country except Norway, which also heavily taxes fuel.
Vancouver is the biggest city in British Columbia. The province imports roughly 60 percent of its refined fuels from oil-rich Alberta and another 10 percent from U.S. refineries across the border. Constrained transportation capacity has long meant the city pays among the highest fuel prices in the nation.
Yet prices could surge even higher: the province’s opposition to an expansion of Kinder Morgan Inc.’s Trans Mountain oil pipeline could see Alberta cutting off fuel shipments to its neighbor amid an escalating dispute.
British Columbia Premier John Horgan says building a new refinery in the province “makes a whole lot more sense than rushing to build a pipeline.” He also advocates expanding capacity in Washington state, whose refineries receive crude shipments from Alberta that cross British Columbia by pipeline or rail.
British Columbia’s biggest refinery -- a Parkland Fuel Corp. plant in Burnaby that accounts for a quarter of the province’s transportation fuel -- underwent a once-in-a-decade maintenance overhaul and just resumed operations on April 9. About 35 percent of Washington state’s refining capacity is offline, according to Bloomberg data, and a weakening loonie makes U.S. imports more expensive. Wholesale prices in the Pacific Northwest region are up 20 cents a gallon since April 9, according to GasBuddy’s McTeague.
“Vancouver has a serious supply problem even with all things back to normal,” says McTeague, who predicts prices will surge even higher in the summer driving season.
Then there are taxes.
As of last May, Vancouver had Canada’s fourth-highest taxes on motor fuel, and a new carbon tax that kicked in this month probably bumped it to second place after Montreal, said Jeff Bowes, research director for the Canadian Taxpayers Federation. That includes a C$0.17 per-liter levy that helps fund the local public transit authority, TransLink, one of only three jurisdictions in the country to have such a component.
“Vancouver’s a strange combination -- it has both high fuel costs and high taxes,” said Bowes. “That’s what makes it so expensive.”
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