Gas prices jump a dime overnight around Metro Vancouver

Metro Vancouver drivers might be facing serious sticker shock Wednesday: The price at the pump has shot up by around a dime — to $1.91 — bringing drivers close to the $2 mark for a litre of ‘regular.’

What’s fuelling the massive increase also provides a forecast for future costs.

Patrick De Haan, head of petroleum analysis at GasBuddy, tells 1130 NewsRadio that drivers can blame the closure of a pair of stateside refineries.

“A permanent refinery shut down that is now starting in southern California and also scheduled maintenance — that’s also occurring at other refineries in California. California has 11 producing refineries for gasoline and now that count will be dropping to 10 by the end of the year and it will also drop next year with another permanent shut down of a refinery in northern California.”

“More pricing volatility will be coming in the months and years ahead.”

De Haan says, bluntly, the long-term picture doesn’t look good.

“These refineries are shutting down because of a very restrictive environment in which they operate in California. Continued regulations which have become more stringent over time are pushing refiners to leave the state. In addition, there’s been talk of a potential shut down of the Olympic pipeline in Washington state that is also negatively impacting gas prices. This is not just B.C., it’s really much of the Pacific Northwest.”

He explains Washington state and Oregon are also seeing big price increases and this latest increase could last a couple of weeks.

De Haan says to make up for the shutdowns, supply will be brought in from overseas.

“We’ll see supply come in more reliably from areas like Japan and South Korea. Unfortunately, with these refineries’ shutdowns much of the West Coast is going to become more reliant on other countries to make ends meet. Without that supply, prices will remain volatile. In fact, with these refineries permanently shutting down, it’s going to put more pressure on a continued supply of gasoline from as far away as southeast Asia, so more pricing volatility will be coming in the months and years ahead.”

The silver lining is this is happening as we enter fall and winter, when demand for gas typically cools off.

“It certainly can’t come fast enough. We tend to see lower driving and lower consumption of gasoline as we get into the fall weather and Canadians and Americans stay closer to home. That’s the only respite we see.”

De Haan explains any potential relief may not come until later this month as supply is brought in from other parts of the world.

The price of gas in Metro Vancouver has jumped more than 15 cents per litre for ‘regular’ in just the last week.

—With files from Mike Lloyd