VANCOUVER, B.C. — Drivers in the Lower Mainland are feeling the effects of chronic fuel supply constraints as prices crest $1.50 a litre in some locations, hovering close to record highs.
And at least one analyst believes they could climb further still.
“It underscores the real big problem in southwestern British Columbia and that’s that they’re chronically short of gasoline and other fuels,” said GasBuddy senior petroleum analyst Dan McTeague, who believes prices will rise even higher.
The current spike, in a season of generally lower demand, is caused in part by the outage of a Burnaby, B.C., refinery that Parkland Fuel bought from Chevron in November, he said.
The 55,000 barrel-a-day refinery, which McTeague says supplies about a quarter of demand in the region, has been down for planned maintenance since early February and the company doesn’t expect to have it fully running again until the end of March.
Still, the region faces longer-standing supply issues that could push prices in the higher-demand summer months to surpass the previous record of $1.56 in June 2014, said McTeague.
Prices increases could also come as two of four refineries in Washington State are planning to go down for maintenance, while the lower Canadian dollar is adding to the costs of buying fuel from the U.S., McTeague said.
High taxes are also compounding the problems, making up 49.3 cents out of the 150.9 cent price per litre seen Wednesday with another 1.2 cent per litre carbon tax coming in April, he said.
“It’s not looking good for that region of the country,” he said. “There’s no spare supply out there, we could see $1.60 for a few days this summer in Vancouver.”
While gas prices could see upward pressure across the country as oil prices maintain some gains, McTeague said the Lower Mainland issues are much worse.
As Vancouver drivers were paying as much as $1.50 a litre Thursday, pump prices were about $1.09 in Calgary and around $1.24 in Toronto, according to data from Kent Group Ltd.