Carbon tax coming off Metro Vancouver gas, but how much will pump prices fall?

If you need to top up your tank, maybe wait until Tuesday when the carbon tax will be lifted from the price of gas.

But how much will Metro Vancouver drivers actually save?

You might expect that when the 17.6 cent per litre carbon tax is lifted that the price at the pump would drop by the same amount, but the price of gas has been trending upward over the past few days — into the $1.90s for Metro Vancouver — and some analysts say that may affect what you see on gas station marquees Tuesday morning.

“We should see a pretty big dip, probably north of 15 cents a litre. It may not be the full 17.6 cents per litre because the price of oil is up close to two-thirds of a per cent [Monday] so that may offset some of the gains,” said Patrick De Haan, head of petroleum analysis at Gas Buddy. 

“In addition, there have been some refinery snags on the West Coast that have caused prices to go up. We’ve already seen B.C. and Vancouver’s price go up by about six cents per litre from where it was last week because of refinery issues in California that have really plagued much of Washington and Oregon, and that is spilling into Vancouver as well,” he told 1130 NewsRadio.

“I do expect a carbon tax pause to lead to a nice big dip tomorrow, but keep in mind with with these refinery issues ongoing, it’s not impossible that once prices do dip, they could slowly start to go up a few cents a litre depending on how long these refinery issues last.”

De Haan insists the recent spike in Metro Vancouver gas prices is not gas companies attempting to gouge drivers as the carbon tax is cut.

“I’ve been doing this for almost 20 years, and every time we’ve seen a government institution pass along a gasoline tax pause or holiday — we’ve seen it several times in the states as well as Manitoba — we saw 99.8 per cent of the decrease being passed along. The beauty of it is competition. Gas companies are going to use the drop in the carbon tax as a competitive advantage to lower their prices, and others will then follow. That will push prices as low as they can go. Competition is a beautiful thing.”

De Haan points out, however, that you may not see lower prices at all stations right at midnight on April 1.

“You may wake up and there may be a station or two that has older technology where you have to manually remove this line item expense — so it may take a little bit of time — but I would expect that within the 24 to 48 hours you should see somewhere north of a 15 cent a litre dip in prices.”

Despite the upward pressure on global prices, De Haan does not expect a litre of regular to breach the $2 mark in Vancouver this summer.

On top of the carbon tax lifting, he says a full-blown U.S. trade war could lead to an economic slowdown, which would lead to consumers pumping less gasoline. Lower demand for gas would then translate to lower prices.  

“As we stand right now, we are already nine cents a litre below than where we were a year ago in Vancouver. So we are already on the right foot, and with the pause in the carbon tax kicking in, it’s going to plummet to well over 20 cents a litre below where we were last year,” he explained.

“Unless there are some major challenges, refinery outages or a dramatic turnaround in the trade war, I think the two dollar a litre mark should not be something that we see for very long, if for any period of time, this summer.”

The federal consumer carbon tax covering most of Canada is due to be paused at midnight April 1, and B.C. is also set to eliminate its provincial carbon tax.

Premier David Eby has scheduled a news conference for noon Monday in Victoria to talk about the lifting of the levy.