Sky-high gas prices in B.C. are result of refinery issues in Alberta, U.S., experts say

Gas prices reaching astronomical heights across much of B.C. this week are the result of what experts describe as a "very unusual" situation, with several refineries in North America having gone offline or running into problems at the same time.

Prices at pumps surged past the $2 per litre mark again in several parts of the province last week — the steepest jump since July. In Metro Vancouver, drivers have seen prices rise by 13 per cent in the past seven days, with prices above $2.30 for a litre of regular at some stations.

When prices jumped in the spring, experts attributed the change to Russia's invasion of Ukraine, which threw the global market into turmoil.

This time, they said B.C.'s problem is coming from Alberta and the U.S.

"It's not coming from the global markets, where actually, prices have been falling," said Werner Antweiler, an economics professor at the University of British Columbia.

"What we're seeing right now is a very unusual spike in the refinery margins and that is driven by refineries being offline unexpectedly and, in some cases, due to maintenance ... that is actually in multiple locations, so this is really a very unusual situation."

Antweiler said refineries in Edmonton and Washington state are both down for maintenance, as is normal in September — refineries usually schedule maintenance at the end of summer when people are driving less.

"They do this regularly [in Washington] but this was a major one, so it lasts over a month ... but the demand has stayed stable," said Vijay Muralidharan, director of R Cube Economic Consulting.

"Any disruption to existing supply will cause issues all across the board."

But there have also been problems with refineries in California, as well as with a refinery in Ohio damaged by a deadly fire.

"There's a lot of capacity that has been coming offline ... and that has been in a situation where refinery capacity is already quite tight. All of that is conspiring to drive up our prices at the pump," Antweiler said.

Gas Wizard, an online price tracker, has predicted the price per litre of regular on B.C.'s South Coast could hit $2.33 on Thursday — making it the most expensive gas in Canada.

Muralidharan and Antweiler both agreed prices are likely to stay high for at least two more weeks while refineries are brought back online.

Experts have said sky-high prices and global warming are motivation to switch from fossil fuel burners to electric or zero-emission vehicles, supply issues notwithstanding. 

Industry leaders have already seen habits change.

"Our sign-ups have increased," said Amitis Khorsandi, director of the B.C. Automobile Associations's Evo car share program. "The number of trips people are taking is up and the length of the trips they're taking is also going up."

In the spring, provincial Energy Minister Bruce Ralston said B.C. is not considering a cap on gas prices.

The B.C. NDP have maintained that stance since 2019, since a government report concluded regulating gas prices provides "some price stability" but does not lead to "lower prices for consumers" overall.

Currently, Prince Edward Island, Newfoundland and Labrador, Nova Scotia, New Brunswick and Quebec regulate the price at the pump.

LISTEN | UBC economic professor discusses rising gas prices in B.C.: