B.C. gas prices hit all-time high

It has never been so expensive to fuel up your car.

Gas prices around Metro Vancouver went up overnight into Friday morning, with many stations posting $2.16 for a litre of regular. And that’s not the end — one industry insider says the price is expected to go up again this weekend by at least a couple of cents.

Roger McKnight, chief petroleum analyst with En-Pro International, doesn’t think Metro Vancouver drivers will see relief anytime soon, warning the next month to six weeks will be scary.

“I can’t see anything stopping prices going up. This is because there is a severe problem with supply of crude oil, gasoline, and diesel. The inventories are very, very low indeed. And then you have the situation in Ukraine whereby the crude supply out of Russia is going to be shut down by the end of the year, so this creates a severe problem globally in so far as crude is concerned so that’s going to be reflected at the pumps until such time a solution is obtained.”

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McKnight says the cost of diesel is going up at the same rate as gas.

“A year ago, the national average pump price of diesel was $1.23/litre. Today it sits at $2.06/litre,” he explained. On the Lower Mainland, that price is closer to $2.35/litre.

He also points to Metro Vancouver paying some of the highest gas taxes in the country and only one refinery being situated in the province as compounding the problem.

The trickle-down effect for consumers

Paying for gas doesn’t stop when you drive away from the pump.

Dave Earle, president and CEO of the BC Trucking Association, says extra costs associated with high gas prices have been or will be passed on to consumers because anything companies don’t want to or can’t absorb, will be paid for by all of us.

“Because we’re such a real-time industry, those costs are passed right on to the shipper, right on to the customer, so any increase you see at the pump, you and I as consumers end up seeing that embedded into the price of literally everything we buy,” he explained.

And he does mean everything.

“When you look around you right now, think about your groceries, your toilet paper, you look at your kitchen cabinets, your flooring, your television, your couch — everything you see, at one point or another, came to you on the back of a truck. And so, everything that moves, everything that you rely on is going to cost a little bit more.”

Earle explains the cost of operating a fleet of truck is also a factor in how much you pay for things.

“The cost of diesel is up about 60 per cent from last fall, so 60 per cent is a huge, huge increase. The cost of what you buy, everything you buy — a round figure if you think about it — is about 10 per cent of the cost of that item is transportation. It varies because there’s a big difference in terms of how a washing machine gets moved and how electronics gets moved, versus how lettuce gets moved. But generally, the lower value day-to-day commodities that we use, like fresh produce, they’re more susceptible and more affected by transportation costs, so that’s why we all notice it on our grocery bill.”

The cost of running a business

Brody McDearmid, Chief Financial Officer of Meridian Meat Farm Market, admits the business is having a tough time dealing with rising gas prices, just like everyone else. He says across the board, they’re seeing increases, whether it’s labour costs, a shortage of products, distribution, and suppliers also charging more to offset the price of fuel.

“In addition to that we’ve already seen significant costs just to the products themselves, like produce has gone up significantly in the last several months, we’ve seen some increases in meat and grocery items continue to increase and this is just another cost. We are trying to absorb what we can, but at the same time, it’s costing the consumers more and it’s at a time when almost all items we’re seeing increases on, so it’s frustrating and challenging,” he explained.

McDearmid adds the company is also increasing the reimbursal rates for select employees, like the IT teams, who have to drive for work and move between various locations.

Meanwhile, he says Meridian Meat Farm Market is trying not to pass along costs to customers — but admits that can be difficult to do.

“It’s hard because we can only absorb so much as a company and yet people can only absorb or accept so much in terms of the cost of living so it’s a delicate balance,” he told CityNews.

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The increased gas prices also come at a tricky time for the business, which launched an online delivery program about a month ago.

“We’ve got a fleet of vehicles and we’ve got a delivery truck and undoubtedly as the cost of fuel has gone up then that’s caused our cost to increase because that fleet and truck use gas and diesel and so for our online business, we have a delivery fee of, I think, $5 right now for a delivery and that’s probably something we’ll have to evaluate.”

He’s calling on the provincial government to intervene and do whatever it can to help lower gas prices.

So far, the only thing Victoria has promised to do is to give drivers a one-time $110 rebate, which at this rate, may not pay for a full tank.