Supply problems on the West Coast are leading to record gas prices in Vancouver, one expert says.
The price of a liter of gasoline in Metro Vancouver and Victoria is set to hit an all-time high this week, climbing to 239.9 cents a liter on Thursday.
A forecast released Tuesday by gas price forecasting website Gas Wizard cements Vancouver and Victoria as the unenviable title of North America’s most expensive city for gasoline.
The Metro area set an all-time high on June 6, 2022, when the price of a regular liter of gasoline averaged 236.9 per liter.
Werner Antweiler, an energy economist at the University of British Columbia’s Sauder School of Business, said gasoline prices are skyrocketing up and down the West Coast of North America as supplies tighten.
“Everything is local. It has nothing to do with international oil markets,” Antweiler said. “It’s all along the west coast, Washington through Oregon to California.
Global oil and gas prices surged after Russia invaded Ukraine in February this year. At the end of the summer, international oil prices decreased. At one point, gas prices remained well below $2 a liter in Metro Vancouver, Vancouver Island and the Fraser Valley. In other parts of the province the price was even lower.
Ahead of the Labor Day long weekend, gas stations in Burnaby and Richmond saw a liter of gas drop to 182.9 at some stations, according to the website GasBuddy.
But in just over a week, the price of a liter of gas has shot up 40 cents at many locations in the Lower Mainland and Capital Region.
If Gas Wizard’s forecast proves accurate again, it means someone filling up a 50-gallon tank in Vancouver on Thursday will pay an average of $119.95, $43 more than someone in Toronto.
Elsewhere in the province, the price per liter of gas is expected to be slightly lower on Thursday, with Gas Wizard predicting an average of about 192 cents per liter in Kelowna and Kamloops and 185.9 cents per liter in Prince George.
West coast supply problem
The high prices we’re seeing now in Vancouver are part of a regional supply disruption, Antweiler said.
The Economist pointed to Edmonton’s Sturgeon refinery in Altana, which was closed from Aug. 8 to Sept. 23 for scheduled maintenance, inspections, renovations and upgrades.
At the same time, four refineries shut down in California, including an unplanned one at Chevron’s Richmond refinery after reportedly experiencing power problems, the Santa Rosa Press Democwrat reported Tuesday.
Meanwhile, there were other maintenance shutdowns at the Ferndale refinery in Washington state and the Olympic pipeline, which serves refineries in the Pacific Northwest. This means that oil that might otherwise flow north stays in local markets.
Even the fire that resulted in two fatal injuries this month at an Oregon, Ohio, refinery is having an effect on prices in the West, Antweiler said.
All this comes at a time when U.S. oil production is falling by more than a million barrels a day compared to pre-pandemic levels, the UBC energy expert added.
“It’s all a conspiracy to create a price spike,” he said.
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