Cheaper gas to start the week in Metro Vancouver

Metro Vancouver gas prices have dropped once again, with stations around the region posting an average of 163.9 for a litre of regular Monday morning.

This comes after prices dipped last week and the week prior, providing a bit of relief to drivers.

And there may be some good news on the horizon, as one industry insider expects prices to stay in this range until February. However, Paul Pasco, principal consultant at Kalibrate, warns they may start climbing then.

“It is fairly dependent on the level of the EU price cap, and that is not settled yet. It gets complicated — you have countries like Greece who make a lot of money off of shipping that want the cap higher (so they can earn revenue for longer) and other countries that want the number set lower to hurt Russia more. It is not certain yet. But we do know that the loss of Russian supply with the refined products ban coming in February is going to hit markets hard,” explained Pasco, who notes U.S. production is what has helped bring prices down recently.

U.S. petroleum reserves

“They are training their strategic petroleum reserves adding to global supply,” he said of American petroleum reserves, adding numbers are “at near historic lows.”

“The market balance has been great but it means that the U.S. is at risk of losing their incase-of-emergency stockpile,” Pasco told CityNews, explaining that when the country wants to fill it back up, that may “put a strain on global supplies.”

“And (that) hits twice because it removes global supply while increasing global demand so the net impact could be huge. Right now, though, none of this is on the table, but it is a looming scenario,” he said.

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Last week, one economics expert said it was hard to say just how long dropping gas prices would last in Metro Vancouver.

“Prices can shoot up and drop very quickly. This is a lesson that we’ve seen over the past couple of weeks,” UBC economics professor Werner Antweiler told CityNews. “I think no expert really, with any confidence say the prices are going to stay this way or go significantly up or down.”

He says with the European Union implementing oil sanctions against Russia on Dec. 5, the possible effect that move will have on the global market remains unclear.

“A lot of question marks are looming on the horizon and that makes it really impossible to make any prediction with any degree of confidence,” he said.

Metro Vancouver has seen some of the highest prices for a litre of regular gasoline anywhere in North America over the past year. At one point, it surpassed $2.39 per litre, breaking previous records.

-With files from Greg Bowman and Tim James