A gas pump is shown at a filling station in Montreal, Wednesday, April 12, 2017. _ The country’s annual inflation rate accelerated to 2.1 per cent last month to reach its highest mark in nearly a year, Statistics Canada said Thursday.THE CANADIAN PRESS/Graham Hughes

Gasoline companies to speak at public inquiry into B.C. pump prices

Premier John Horgan ordered the inquiry in May when prices at the pump reached $1.70 a litre

An industry expert says a public inquiry into British Columbia’s record-breaking gasoline prices may increase the public’s understanding of a murky market but the provincial government’s options for response are limited.

Michael Ervin, senior vice-president with consulting firm Kent Group that specializes in the downstream petroleum industry, said he also doesn’t expect the inquiry to uncover any bombshell revelations.

The reason prices at the pump are so much higher in Vancouver and other B.C. cities than comparable jurisdictions all funnels down to supply and demand, he said.

“It really comes down to very tight supply relative to pretty strong demand in the Lower Mainland and B.C. in general,” Ervin said in a phone interview.

Premier John Horgan ordered the inquiry in May when prices at the pump reached $1.70 a litre, saying gas and diesel price increases were ”alarming, increasingly out of line with the rest of Canada, and people in B.C. deserve answers.”

He tasked the British Columbia Utilities Commission with overseeing the inquiry. A three-member panel chaired by CEO David Morton is set to begin its oral proceedings on Wednesday in Vancouver.

READ MORE: B.C. gas prices rose with land values, but high costs still not fully clear: report

But the inquiry has already encountered some hurdles.

The utilities commission beefed up its confidentiality terms last week after six of seven fuel companies refused to share their retail margins, saying it would compromise their positions in a competitive market.

The new terms grant advanced approval of confidential status to those who submit information that they identify as commercially or competitively sensitive under the new terms, rather than granting the status after the content is reviewed and deemed eligible.

“We felt that under the circumstances it would not be unreasonable to provide them with that assurance,” Morton said in an interview.

Calgary-based Parkland Fuel, which had raised concerns about confidentiality, also complained of tight deadlines in a letter from its lawyers to the commission on Tuesday.

“The inquiry has the potential to profoundly impact Parkland’s business,” it said, adding that it is a voluntary participant and short notice on what the hearings would look like impedes their “full and fair participation.”

“The only way to mitigate that harm is to delay the workshop.”

The utilities commission released a schedule and description of the so-called oral workshops, along with questions that will be asked, over the next two days. But it said it’s committed to staying on schedule and Parkland said Friday it would still participate.

Other companies said they were reassured by the new confidentiality terms, including a spokesman for Husky, but didn’t commit to release the data.

“The advance ruling on confidentiality does go a long way to satisfy Husky’s concerns,” Mel Duvall said in an email Thursday.

“That said, we are still considering whether there are other measures that can be implemented by the BCUC that would provide further protection for the interveners.”

Shell said it would provide the data ordered but requested the inquiry use the same confidentiality process that the National Energy Board used in proceedings dealing with pipeline access, including storing confidential material in a red folder.

Suncor said it was preparing to submit the figures by Monday, while Imperial Oil said it still wasn’t comfortable doing so. Costco submitted two copies of a questionnaire Friday, one for the public and one with three additional answers it deemed confidential.

Questions shared in advance by the utilities commission reveal some of the information the public may learn.

They cover capacity and costs of using the Trans Mountain pipeline, whether refineries co-ordinate with one another to plan for maintenance repairs and shutdowns, and whether companies divert refined product from B.C. when gas prices are low.

“We’ll be making findings on what we’ve found, whether it’s competitive or not, how the prices are set, why the prices are different here and why they fluctuate more than they do in other parts of Canada,” Morton said.

The province has also asked the utilities commission to explore mechanisms the province could use to moderate price fluctuations and increases.

Recommendations on the Trans Mountain pipeline are unlikely, Morton said, adding that he didn’t want to preclude anything prematurely.

Ervin said there are a few options facing the province:

— It can create a watchdog agency to monitor the elements going into the pump price and where they seem to change, in order to better understand and explain to the public what happens and why.

— It can reduce taxes, which are among the highest in Canada, especially in the Metro Vancouver area where the carbon tax represents 9 cents per litre and the transit authority adds another 18.5 cents per litre.

— Or it could pursue regulation of crude going into refineries, wholesale gasoline prices, or prices at the pump. Each of those regulations is “problematic,” he said.

Crude and wholesale gasoline are globally traded commodities, he said. That means for example, that if wholesale gasoline prices are capped low, American wholesale buyers may buy them up leaving B.C. dry, he said.

The Atlantic provinces regulate prices at the pump but that may have a counterproductive effect in B.C. Retail margins aren’t large and have actually declined over the last 20 to 30 years when inflation is taken into account, Ervin said.

“It would most certainly have the consequence of putting gas stations out of business,” he said.

Amy Smart, The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

Australian gold mining giant acquires Red Chris mine

Newcrest now owns 70 per cent of the mine south of Iskut and operatorship

Teen sexually assaulted at Radley Beach

A sexual assault took place at Radley Beach in Burns Lake on… Continue reading

Missing boy was dehydrated but in good health

The boy who went missing near Mackenzie was found to be somewhat… Continue reading

All Nations Driving Academy gets $360K boost from province

Terrace-based driving school bridges gap in services for remote northwest B.C. communities

Skeena Watershed reopened for recreational pink and coho

Four sections and tributaries remain closed

Bodies of two missing Surrey men found near Ashcroft: RCMP

Ryan Provencher and Richard Scurr have been missing since July 17

B.C. manhunt suspects left cellphone video before they died: family

Family member says Kam McLeod, Bryer Schmegelsky recorded final wishes

VIDEO: RCMP unveil new, state-of-the-art forensics lab in Surrey

The laboratory is expected to handle thousands of forensic services from across Canada annually

Scheer promises EI tax credit for new parents if Conservatives form government

The government currently taxes employment insurance benefits for new parents

B.C. seizes 1.5M grams contraband tobacco, down from 5.75M grams the year prior

The 2019-2020 seizures were a sharp drop compared to the 2018-2019 year,

B.C. Speaker tight-lipped about aide’s legislature security tour

B.C. Liberals question Alan Mullen’s drive across Canada, U.S.

B.C. sets rules for ride hailing, same minimum fee as taxis

Larger operating areas seen as threat by cab companies

Most Read