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Investigation into volatile B.C. gasoline prices will have broad reach: Horgan

Premier John Horgan talks with media in Prince George Tuesday morning. Bill Phillips photo
Premier John Horgan

The province has released terms of reference that will guide the British Columbia Utilities Commission’s (BCUC) investigation into what is driving high, volatile gasoline prices in British Columbia.

“The rapid increase in gas prices in B.C. is alarming, increasingly out of line with the rest of Canada, and people in B.C. deserve answers,” said Premier John Horgan, in a news release. “We asked the BCUC to conduct a fair, transparent and comprehensive independent investigation. These terms provide the broad reach it needs to find answers and give recommendations to inform the path forward.”

Horgan himself, however, has pointed to price-gouging as major contributor to increased pricing amid calls to reduce provincial taxes, particularly the carbon tax, on gas.

Earlier this month he said that over the past couple of years the amount of refined oil coming from Alberta, which goes to local refineries and then to gas stations in the province, has been decreasing while the amount of heavy diluted bitumen, headed overseas, has been increasing. And that is what is now putting the squeeze on gas prices in the Lower Mainland.

“If you look at the data from 2017, the amount of the refined product coming through the existing pipe was 37 per cent (for British Columbia consumption), 54 per cent of that heavy oil was going to Washington State and nine per cent was exported,” he said May 1. “Last year, the numbers of export oil jumped from nine per cent to 21 per cent, knocking down refined product (for B.C.) from 37 per cent to 27 per cent. There is less refined product coming into the Lower Mainland now with the existing pipeline and no commitment from TMX to do something about that with the twinning of the pipeline.”

The BCUC may exercise any of the powers provided to it under the Utilities Commission Act, including compelling oil companies as witnesses to explain their prices to the commission.

Through the review’s terms of reference, the BCUC has been asked to:

* examine the market factors that affect wholesale and retail prices in British Columbia;

* investigate gasoline price fluctuations, including the extent of possible competition concerns, such as price fixing and gouging;

* explain the difference in refining margins between British Columbia and the rest of Canada, including why in recent months refining margins for Vancouver were more than double the Canadian average;

* explain the difference in retail margins between British Columbia and the rest of Canada, as well as regional difference within British Columbia; and

* review the potential of regulatory measures used in other jurisdictions across Canada and North America to enhance transparency about how prices are determined.

“High and wildly fluctuating gas prices in B.C. are hurting people and B.C.’s economy,” said Bruce Ralston, Minister of Jobs, Trade and Technology. “Speculation and misinformation will not lead to solutions. The BCUC is a respected independent regulator and the appropriate body to investigate gas prices in the best interest of British Columbians. We look forward to the report and recommendations.”

The terms of reference require final report to be delivered by Aug. 30, 2019.

Read the May 7, 2019, letter from Premier Horgan to the BCUC requesting an investigation into gas prices:
https://news.gov.bc.ca/files/20190507_BC_Utilities_Commission_Letter.pdf

Read the terms of reference for the BCUC investigation respecting gasoline prices in British Columbia:
https://news.gov.bc.ca/files/OIC_British_Columbia_Utilities_Commission.pdf