B.C.’s carbon tax is the highest in Canada, and the low-carbon fuel standard is increasing. (Black Press Media)

B.C.’s costly gasoline partly due to low-carbon requirements

B.C.’s increasing requirement similar to Oregon, California

B.C.’s requirement to continue reducing the “carbon intensity” of its gasoline and diesel until 2020 is unique in Canada, and fuel suppliers argue this is one reason why prices are higher than surrounding jurisdictions.

B.C. matched the federal low-carbon fuel standard of a five per cent reduction in carbon intensity in 2010, and went further, requiring a 10 per cent reduction by 2020. Similar regulations are in place in California and Oregon, but not in other Canadian provinces.

The reduction is typically achieved by blending plant-based ethanol with gasoline or vegetable-based fuels with diesel, which can cost more and requires additional storage and blending.

The B.C. Utilities Commission delivered its report on high fuel prices last week, as directed by the B.C. government in May after gasoline and diesel prices hit record levels. Premier John Horgan suggested profit taking by oil companies was the main reason, and directed that taxes and other government policies such as the low-carbon fuel standard should not be considered.

Companies testified about the effect of government policies anyway, and some argued that biofuel costs are a factor.

In a 2015 letter to producers, then-energy minister Bill Bennett said lowering the carbon intensity of fuels further “is achievable through the use of emerging fuels; for example, gasoline made from natural gas, lower carbon diesel produced through advanced bitumen refining, and renewable diesel made from vegetable oils or tallow.”

BCUC chair David Morton said that taxes aside, there is an “unexplained” 13-cent increase in southwestern B.C. gasoline prices compared with the U.S. Pacific Northwest, where the spot wholesale price for urban B.C. is set.

RELATED: B.C. gasoline prices higher, reasons not clear to BCUC

RELATED: Land values, credit card fees rise with gasoline prices

In northern B.C. there is a six per cent jump in price compared to Edmonton where that region’s wholesale spot price is set, taking into account refinery disruptions, crude prices and other industry factors.

“Prices in the Metro Vancouver region are higher by an unexplained 13 cents a litre, and they’re higher than would be expected under more competitive conditions,” Morton said as he released the report. “There is no evidence to suggest collusion among the retail operators exists, nor is there evidence of cartel behaviour.”

The price gap for B.C. calculates out to $490 million a year in extra sales revenue for suppliers, which Jobs, Trade and Technology Minister Bruce Ralston claimed shows B.C. residents are being “ripped off” due to a lack of wholesale competition.

“Our government is concerned with the allocation of refined gasoline flowing into B.C. as well as the lack of transparency around how the price of gas is set,” Ralston said.

In B.C., provincial tax on a litre of gasoline currently amounts to 34.39 cents per litre for Metro Vancouver, including 17 cents to fund TransLink operations. Victoria region transit tax adds 5.5 cents, and across the province carbon tax currently adds 8.89 cents. Another 6.75 cents applies across B.C. to fund the B.C. Transportation Finance Authority, a Crown corporation that owns all provincial highways and land held for future infrastructure.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

UPDATED: Joe gets suspended sentence in Teddy the dog cruelty case

Melissa Tooshley expected in court on Thursday in same case

Victoria councillors consider 55 per cent raise

Greater Victoria Chamber of Commerce CEO says councillors are ‘absolutely not’ city employees

Five rescued after boat smashes into the rocks between Tofino and Ahousaht

Ahousaht volunteers, coast guard leap into action in stormy weekend seas

Vancouver Island cat stars in national fundraising calendar

Jax the cat was one of 13 pets selected from nearly 45,000 entries

Cold, stormy winter forecast across much of Canada, The Weather Network predicts

In British Columbia temperatures will be slightly above normal and precipitation will be just below normal

Nineteen boats carrying invasive mussels stopped at B.C. borders

Waters of Columbia-Shuswap still test mussel-free

Saanich resident calling for gas powered leaf blower ban finds support as autumn leaves fall

‘Cities don’t need to be noisy and happiness and wellbeing should be a priority,’ says the resident

Escaped Metchosin inmate sentenced to additional year tacked on to 14-year sentence

Man escaped from William Head Institution arrested days late in Esquimalt

Woman ‘horrified’ after being told to trek 200 kilometres home from Kamloops hospital

‘I can’t get from Kamloops back to 100 Mile House injured, confused… no shoes, no clothes whatsoever’

Canadian universities encourage exchange students in Hong Kong to head home

UBC said 11 of its 32 students completing programs in Hong Kong have already left

Midget no more: Sweeping division name changes coming to minor hockey in Canada

Alpha-numeric division names will be used for the 2020-2021 season and beyond

B.C. pushes for greater industry ‘transparency’ in gasoline pricing

Legislation responds to fuel price gap of up to 13 cents

Campbell River RCMP officer assaulted during traffic stop

Officer expected to make a full recovery; had been conducting impaired driving investigation alone

Most Read