Kamloops gas prices, June 5 (image credit - CFJC Today)

By Michael Reeve

FUEL PRICES

“Relief is coming:” Lower Kamloops fuel prices expected soon

Jul 5, 2022 | 4:25 PM

KAMLOOPS — Usually, the price of fuel is around 15 cents cheaper in Kamloops compared to the Lower Mainland, where additional taxes drive up the bottom line. However that is not currently the case, as prices here in Kamloops are averaging around $2.16 per litre, while on the coast prices are as low as $2.04.

According to a petroleum expert, the reason for the flip in prices is due to the supply chain, and how ethanol is transported to different locations across British Columbia. For example, on the coast companies can use barges, while Kamloops must rely on rail.

“What essentially is the problem, is that they import ethanol from the US to blend, to fulfill blending requirements of B.C. and wider Canadian mandates. They have to rail the ethanol. Since the beginning of the year, the ethanol association (Renewable Fuels Association) has been complaining in the U.S. that the inventory levels are lower and the railing network is not dealing with the demand of transporting ethanol to Canada and Mexico,” said Vijay Muralidharan, Managing Director for R Cube Economic Consulting Inc.

Adding to the blending issues is also the increased demand seen as summer begins.

He also noted that the refineries in Edmonton had maintenance shutdowns, lowering the supply. Crude prices around the world have begun dropping in the past few days which should result in relief at the pumps.

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“The difference between Vancouver and Kamloops is not like a light switch. It’s going to take a little bit of time because demand is strong. As supply slowly comes in you will see the relief — relief is coming. It’s that there has been no ethanol supply for seven days and then supply comes in, the demand is still strong and there is pent-up demand from the last seven days,” said Muralidharan.