Price gouging not to blame for recent increase in Kamloops gas prices: industry expert

Patrick De Haan is the head of petroleum analysis at GasBuddy. He says there are two main reasons the prices are so starkly different: the source of the gasoline and taxation.

Speaking to CFJC Today from his office in Chicago, De Haan says B.C. levies taxes at a higher rate than Alberta, and gets its gas from a more expensive market.

“Canadian prices follow U.S. markets,” said De Haan. “Unfortunately for British Columbia, much of the market that determines the basis for prices is the U.S. west coast market, whereas Alberta is more tied to the U.S. midwest market.”

“The west coast of the United States, which is the foundation for prices in B.C., is generally much higher, simply because there are fewer refineries, there are more stringent environmental regulations that involve more stringent production of gasoline,” he continued. “That factors into what motorists and consumers are paying as well.”

As of Friday afternoon (May 8), the Costco gas bar, at 99.9, was the only location in Kamloops offering unleaded gas at less than one-dollar-per-litre.

Only two weeks ago, prices had dipped into the 70-cent range.

De Haan says he hopes British Columbians took advantage of that time because they were getting a great bargain.

“We had seen prices largely come down much quicker than normal in British Columbia,” he said. “Prices fell a matter of about 30-cents-per-litre over just a month’s time frame, which is fairly impressive. Retail gas stations and gas bars did pass along those lower prices relatively quickly.”

Governments and consumer watchdogs have warned of price gouging in other consumer goods during the COVID-19 pandemic.

De Haan says that’s always a danger with “bad actors”, but that is not why prices have increased over recent weeks.

“Now we are starting to see a rebound and that is not stations looking for additional profit. That’s due to the fact that oil prices have seen a remarkable comeback — at least from just a few weeks ago. Oil prices have doubled, up to about 25-dollar-per-barrel. With it, the price of gasoline has gone up as demand has started to rebound as provinces begin slowly reopening.”

by James Peters

Price gouging not to blame for recent increase in Kamloops gas prices: industry expert

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