Lower Mainland gas prices on their way down: analyst

For months, drivers in the Lower Mainland have been paying the highest gas prices compared to anywhere else in North America, but that could soon change.

One industry insider has a preliminary prediction that the price at the pump could drop roughly 10 cents by the end of the week, which is the first significant drop we’ve seen in a while.

The other drop could come in the fall, should the country be plunged into yet another recession.

Paul Pasco, gas analyst with Kalibrate, says if the economy crumbles in a couple months, we may see a dip in prices.

“Looking more at the macro picture, I feel like there’s the supply tightening we’re seeing on the basis crude markets that is sort of questionable whether we’re going to see the recession and pull-back, which will drive prices further backwards or are we going to see the supply constraints that are in the immediate near-future months, leading us to a point where prices continue to stay relatively stable. My view on supply and demand dynamics, I think we’re going to stay relatively stable, [but] there is a chance for further decline in September in the markets right now,” Pasco said.

He says we’ve been seeing a steady drop or stabilization at the pumps since last month.

“When I was looking through the trends for the Lower Mainland, it seemed like probably mid-June, there started being a disconnect with yourselves and what had been trending in general. Oil markets and the diesel markets, it stayed elevated I think, due a little bit to the [Canada Day] long weekend and the supply issues that were coming out of the Okanagan. What you guys probably saw over the last two weeks is gasoline catching up the decline that had happened in those two price-points and I would believe you’ll be reaching a point of stability going through the summer,” Pasco said.

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Pasco doesn’t expect to see prices go up over the summer. “We’re seeing a tightening of oil supply markets. I don’t think we’re going to see large jumps in the price of oil at this point, which means refined fuel should stay lower but I’m not expecting a massive decline,” Pasco said.

When it comes to new federal clean fuel regulations that were announced last week by Ottawa, Pasco doesn’t think it will lead to a spike in gas prices in BC. The rules are set to kick in by 2030, but he says they’ll be in line with rules B.C. previously put in place.

“The clean fuel regulations will have marginal impact in BC. The new Canadian legislation will bring the Canadian standard in line with the BC policies set in 2010. Overall, the increased demand for Ethanol and competition for the CO2e credits might result in a marginal increase in prices. Currently, Alberta, Manitoba, Ontario, and Saskatchewan already have clean fuel mandates. The legislation will result in the standards in these provinces being brough up to BC levels of compliance but will also force provinces like Quebec who were in talks to implement a standard to bring one in to action. My best estimate is that BC should not even expect to see a 6-cent increase, that price is more likely for Alberta with BC being on the lower end of closer to 4 cents by 2030.”

He adds B.C. has standards right now that are in line with West Coast states, including California and Oregon, which are considered to have some of the highest standards for clean fuel regulations.

Meantime, if you’re still waiting for your $110 ICBC gas rebate cheque, the public insurer, as we previously reported, hopes to have all 3.5 million cheques out to British Columbians by the end of this month.