Gas prices around Vancouver are up, what’s happening?
Posted July 27, 2023 12:57 pm.
Last Updated July 27, 2023 1:59 pm.
Drivers around Metro Vancouver have likely noticed gas prices have once again crossed into the $2 a litre mark for regular this week.
There are a number of factors that have pushed prices up in the short term, explains Patrick De Haan, the head of petroleum analysis at GasBuddy.
“A lot of stations went up to 201.9 yesterday, back over the $2 a litre mark — something we’ve been able to avoid for the last couple of weeks. But, very quickly, this week we’ve seen the price of oil eclipsing $80 a barrel for the first time since April,” he explained.
Oil production, U.S. heat
One factor is OPEC and its production cuts.
“Especially since Saudi Arabia and Iraq are now on the same page with cutting oil production, at a time now that it looks like the broader economy may avoid a larger slow down, and that means more consumption,” De Haan told CityNews. “But with OPEC yanking some of that production offline, that’s pushed the price of oil up.”
Another factor is what De Haan describes as “tremendous heat” that’s gripped parts of the U.S., which has led to refinery issues.
He says some of the largest refineries in North America are “struggling with heat-related set backs and power disruptions” that have had an impact on their ability to provide gasoline, diesel, and jet fuel to the market.
“With the price of oil at its highest level in several months and now refinery issues because of the heat, that’s pushed gas prices up coast to coast in Canada and the United States,” he added.
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As for what’s to come on the horizon around Metro Vancouver, De Haan says there may be more upward pressure on prices for the closing month of the summer.
That’s especially true with hurricane season around the north Atlantic.
“Now, we’re getting into the peak of hurricane season and with ocean temperatures that are very high, we risk further disruption of some of those large refineries,” he said.
Metro Vancouver isn’t the only jurisdiction likely to feel the pressure, though. De Haan says the Maritimes could also see an impact, as could other regions in Canada.
Gas price differences by station
While prices have moved into the territory of $2 per litre of regular gas in Metro Vancouver, they’re still a far cry from the record highs the region saw last year.
Drivers may also find varying prices across the Lower Mainland, and that’s mostly due to volatility, De Haan says.
“On Monday, the wholesale price of gasoline jumped by over 5 cents a litre, so the gas bars and stations that are filling up with that more expensive gasoline are likely to start raising their prices quicker than others might do. Not only that, then you have the cost of doing business in some areas may be higher or lower,” he explained. “Directly in Vancouver, the price of doing business is much higher, so they may be more apt to pass along the increases quicker.”
He says stations in more rural areas may have gas they bought earlier, meaning they have a lower replacement cost than stations in places like Vancouver.
Then there’s the TransLink tax to help fund transit initiatives and local infrastructure around Metro Vancouver, along with other taxes.
