Volatile global economic realities have caused gas prices to fluctuate wildly around Metro Vancouver, but is the region on the road to breaking a record?
Over the past week, gas prices have climbed above 220 cents per litre in parts of Metro Vancouver. According to GasBuddy, late last year and early this year, prices were as low as 137 cents per litre.
That means that since then, gas prices have jumped almost a whole dollar per litre.
We connected with Kalibrate Consultant Suzanne Gray for some analysis on the situation and whether we’re heading for a record-breaking summer for gas prices.
We already know some of the reasons why the price at the pump has been so volatile, including tensions in the Middle East leading to crude oil price movements.
You can thank U.S. President Donald Trump for some of it, as Gray says that the flip-flopping political messaging we’re hearing regarding the conflict in Iran is directly contributing to how much consumers are having to pay.
“Mixed messages regarding the conflict in the Middle East have contributed to crude price swings. At times, there are signals that a solution to the war is imminent, followed by messaging that the war is far from over. These mixed messages are contributing to crude price volatility, which is then passed through to retail gasoline prices,” Gray said.
On top of the crude oil price swings, Gray says that there’s been a reduction in refinery processing capacity on the West Coast, thanks to a refinery closing in California. The Benicia Refinery stopped producing fuel in April and is the second refinery to close over the past year.
“This causes the entire West Coast to compete for gasoline imports, and can contribute to increased price volatility. This comes at a time when gasoline demand is beginning to pick up as we head into the busy summer driving season,” Gray said.
What’s the current record, and could it be broken?
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According to Gray and Kalibrate’s daily pump price survey, the highest Vancouver prices were recorded on Sept. 30, 2022, at 241.9 cents per litre. The price at the pump in Metro Vancouver may have already broken a record if residents were still paying the carbon tax.
Gray said that comparing today versus 2022, the tax component is 22 cents per litre lower now, thanks to the removal of the carbon tax and the federal tax relief.
“As we head into the summer, we may see the refining-margin component of pump prices expand with rising demand; however, the true driver of pump prices will be the direction of crude oil prices,” Gray said.
She added, “Futures markets today are expecting crude oil prices to remain above $100 a barrel in June and July before declining. Therefore, prices in Vancouver will likely remain elevated well into the summer months and remain prone to continued volatility.”
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