EDITORIAL: Oil companies have motorists over a barrel

One thing is for certain – gas prices will increase

Whether it’s an unseasonably mild winter, a changing stance on trade policy anywhere around the globe, or an explosion on the other side of the country – one thing is for certain. Gas prices are going to increase.

Industry officials are warning that a large explosion and fire at an oil refinery in New Brunswick could lead to higher gas prices in British Columbia. A massive blast at the Irving Refinery shook Saint John on Monday. The cause of the explosion is believed to be a malfunction in the refinery’s diesel treating unit.

But no matter the cause, the consequences are far more clear than the thick smoke that blanketed the New Brunswick city.

“A fire that caused undisclosed damage to the Irving refinery in Saint John, New Brunswick, Canada’s largest, has not yet been fully quantified by markets and comes in a period of lower demand and stronger inventories generally in the U.S. northeast,” said Dan McTeague, a senior petroleum analyst at GasBuddy. McTeague says the refinery fire comes at a time of lower demand and stronger inventories generally in the U.S. northeast.

“Nevertheless, a more thorough disclosure of damage to the refinery could yield concerns for supply and raise market prices should the plant’s 330,000 barrel a day output be curtailed for an extended period of time,” said McTeague. “Combined with a weaker Loonie due to the effects of pipeline constraints, motorists should look to higher pump prices generally in the weeks ahead.”

Drivers here on the Island have been repeatedly told that our gas is primarily supplied by the refinery in Cherry Point, Wash. – and we should pay little attention to issues on the other side of the country. But, of course, that’s only when those issues would lead to prices decline.

Don’t believe it? Consider this: The price of oil is currently about $74 a barrel, while the price at the pump sits at $1.39 a litre here in Greater Victoria. At its peak, oil prices reached $147 a barrel in late 2008. Gas prices at the time were $1.53.6 in the Capital Region, although oil prices alone would suggest the price should be closer to $2.75 a litre.

One of these days, someone in Ottawa is going to invest in a calculator and get to the bottom of this.

Just Posted

15 new Indigenous teacher training seats added at Cowichan VIU campus

Thorne said the new Indigenous teacher education curriculum that is planned at VIU

Cranberry fields not forever in British Columbia

Canadians consumed 2.6 kilograms fresh cranberries in 2016, but industry faces challenges

Port Alberni votes to change way council pay is increased

New way will focus on Consumer Price Index, future councils

Transplant caregiver starts website for financial, mental health support

Beth Campbell-Duke started Transplant Rouges after her husband’s double lung transplant

Andrea Rondeau column: Take a deep breath, and reflect on what’s really important

The one in my head goes like this: ‘Slow down, you move too fast’.

Windstorm topples tree onto townhouse in Nanaimo

Heavy winds have thousands of B.C. Hydro customers without power

Man dies after falling from B.C. bridge

Intoxicated man climbed railing, lost his balance and fell into the water below

B.C. animation team the ‘heart’ of new ‘Spider-Man: Into the Spider-Verse’

The animators, largely based in Vancouver, ultimately came up with a creative technique that is drawing praise

Light at the end of the tunnel for UN climate talks

Meeting in Katowice was meant to finalize how countries report their emissions of greenhouses gases

Janet Jackson, Def Leppard, Nicks join Rock Hall of Fame

Radiohead, the Cure, Roxy Music and the Zombies will also be ushered in at the 34th induction ceremony

Supreme Court affirms privacy rights for Canadians who share a computer

Section 8 of the Charter of Rights and Freedoms protects Canadians against unreasonable search and seizure

‘Ghost bikes’ installed to remember teen cyclists who died in Port Alberni

Cycle Alberni installs memorials to remember teens, remind all about road safety

Victoria in Canada’s top three cities for highest household debt

Rising interest rates could cause required payments to exceed budgets of highly indebted households

‘I practically begged’: Kootenay woman with breast cancer denied referral to Calgary

Breast cancer patient left to fight disease alone after being denied referral to Calgary

Most Read