Gasoline prices in B.C. have risen in line with land costs and credit card processing fees, but that doesnB次元官网网址檛 fully explain why theyB次元官网网址檙e so much higher than in other parts of Western Canada, a new report says.
The report by Deetkten Group was posted online late Wednesday by the B.C. Utilities Commission, which is overseeing a public inquiry into sky-high gas prices in the province.
The consultantB次元官网网址檚 report says VancouverB次元官网网址檚 gasoline retail margins, which are the difference between the wholesale price for fuel and the retail price less tax, B次元官网网址渉ighlyB次元官网网址� correlates with local land values.
It also says credit card processing fees are applied as a percentage of a total transaction, meaning the fees will be higher in jurisdictions like Vancouver where prices at the pump are already high.
B次元官网网址淩ising land costs and credit card processing fees may account for nearly the entire differential observed between Vancouver and comparable areas, at least up to the end of 2018,B次元官网网址� the report says.
But even after those factors are taken into account for this year, 1.4 cents per litre in the retail margins remains unexplained.
The report also canB次元官网网址檛 fully explain why wholesale gas prices are much higher in B.C. cities compared with other jurisdictions.
The consultants compared wholesale prices in Vancouver and Kamloops with Edmonton and Seattle, which are also sources of supply for B.C.
Transportation and regulatory costs may account for higher wholesale gas prices in B.C., but even estimating those costs at their highest potential doesnB次元官网网址檛 explain the difference, it says.
B次元官网网址淓ven the highest estimates of transport and regulatory costs combined do not sufficiently account for the differential in wholesale prices between the Vancouver market and the Edmonton and Seattle markets, particularly in 2019,B次元官网网址� the report says.
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A differential of about five cents per litre between Vancouver and Edmonton this year is unaccounted for in the report.
Unlike gas prices, diesel prices have remained largely consistent with historical trends when compared with other parts of Western Canada.
B次元官网网址淭his may be in part due to different demand dynamics in the diesel market,B次元官网网址� it says.
Premier John Horgan ordered the inquiry in mid-May as the price of a litre of regular gasoline climbed above $1.70.
In commissioning the probe, he said that gas and diesel price increases were B次元官网网址渁larming, increasingly out of line with the rest of Canada, and people in B.C. deserve answers.B次元官网网址�
Four days of oral submissions are to begin next week and the three-member panel can question industry representatives, including gas and diesel suppliers.
Amy Smart, The Canadian Press
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