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

RDOS to study sites for composting facility

Penticton and Okanagan Falls landfills will be examined

Summerland grocery store offers warm atmosphere, community service

Nesters Market has been involved in numerous initiatives within Summerland

Codling moths remain a problem for Okanagan apple growers

Problem areas for pest include Summerland, Penticton and Naramata

Regional District of Okanagan Similkameen works to control mosquito populations

Control efforts in the region have been starting earlier each year

Summerland Ladies Club competes for Rental Cup

One-day golf tournament sponsored by Summerland Rental Centre

PHOTOS: Young protesters in B.C. and beyond demand climate change action

Many demonstaers were kids and teens who skipped school to take part

Walmart to quit selling e-cigarettes amid vaping backlash

U.S.’s largest retailer points to ‘growing’ complications in federal, state and local regulations

Climate protesters temporarily shut down road in downtown Kelowna

Protesters are demanding politicans take action to stop climate change

Security footage shows grab and go of cash in South Okanagan business break-in

Marla Black is asking for the public’s help in identifying the man who broke into Winemaster

Vehicle taken by gunpoint in South Okanagan carjacking recovered

Penticton RCMP said the criminal investigation remains very active and ongoing

Former B.C. lifeguard gets house arrest for possession of child porn

Cees Vanderniet of Grand Forks will serve six months of house arrest, then two years’ probation

Crown alleges resentment of ex-wife drove Oak Bay father to kill his daughters

Patrick Weir alleged in his closing arguments that Andrew Berry is responsible for the deaths of his daughters

‘I’d do it again,’ says B.C. man who swam naked, drunk in Toronto shark tank

David Weaver, of Nelson, was drunk when he went to Ripley’s Aquarium in Toronto on Oct. 12 2018

How to react to Trudeau’s racist photos? With humility, B.C. prof says

‘We are now treating racism as a crime that you cannot recover from’

Most Read