The sa国际传媒 public might get some answers today on what influences gasoline prices, particularly in the Lower Mainland 鈥� among the highest in North America 鈥� but might not get hoped-for relief at the pumps.
On the deadline ordered by Premier John Horgan鈥檚 NDP government, the sa国际传媒 Utilities Commission will deliver the findings of a gas-pricing inquiry today.
But two industry observers said the public shouldn鈥檛 to get its expectations up that it will lead to reduced gas prices.
鈥淭he government鈥檚 options are severely limited,鈥� said Werner Antweiler, a professor at the Sauder School of Business at the聽University of sa国际传媒
Horgan ordered the gas-price inquiry in May when prices at the pump reached $1.70 in the Lower Mainland, saying the public deserved answers about why prices are so much more expensive and variable than in other jurisdictions. At the time, the sa国际传媒 Liberals and Alberta government bought ads blaming Horgan and linking his government鈥檚 resistance to the Trans Mountain pipeline expansion and taxes to the surging costs.
The commission鈥檚 marching orders were to explore factors that might be influencing gas and diesel prices in sa国际传媒 since 2015, including refining and retail margins, as well as factors that contribute to retail and wholesale price fluctuations such as access to refineries, amount of fuel in storage, and refinery and pipeline capacity.
The commission was to explore mechanisms the province could use to moderate price-fluctuation increases.
Antweiler said the province could intervene on the tax side, but is severely limited as much of the taxes it controls are targeted to transit and roads, he said.
The other option is to bring in price controls, but that is 鈥渆conomic nonsense,鈥� said Antweiler, as curtailing prices will interfere with the competitive market, likely reduce supply, resulting in motorists potentially waiting in lines to get fuel.
Antweiler noted that one of the challenges is that sa国际传媒 remains a peripheral market in North America, with only two local fuel sources, refineries in Burnaby and Prince George. It relies heavily on Alberta for refined fuel products that can be constrained by refinery outages and space on the Trans Mountain pipeline. Both mean higher costs for transportation, via truck or rail from Alberta, or farther afield in markets in the U.S., he said.
Antweiler said the commission heard interesting information on what was driving prices, including that in the Lower Mainland higher retail margins were largely accounted for by the high cost of land. On the wholesale side, factors such as increased costs related to sa国际传媒鈥檚 low-carbon fuel standards were cited by industry.
Petroleum analyst Dan McTeague said he doesn鈥檛 believe the commission鈥檚 work will lead to any relief from higher gas prices in sa国际传媒 He also noted that sa国际传媒 is subject to unique costs, including regulations that don鈥檛 exist elsewhere.
If you want a low-carbon fuel standard, you have to change production, make physical changes. 鈥淚f you want boutique gasoline, you are going to have to pay [for it],鈥� said McTeague.
Not everyone agreed in testimony provided to the commission.
Mark Eliesen, a former sa国际传媒 Hydro president, and Robyn Allan, a former ICBC president, both under the NDP, put the blame for high prices in sa国际传媒 on a lack of competition.
