Gas in Vancouver is predicted to go from $1.55 a liter to $1.60 in the coming weeks.
Gasoline in Canada is priced in litres. A litre is slightly more than a U.S. quart. The volume of a Canadian litre is 34 ounces, vs. 32 for the U.S. quart.
Four litres is a shade more than one U.S. gallon. 4 litres=1 U.S Gallon. $1.55 x 4=$6.20 Canadian.
Today, the Vancouver price is $1.55 per litre Canadian. At today’s exchange rate of 0.78, $6.20 Canadian is worth $4.84 in U.S. funds.
If the price per litre goes from $1.55 to $1.60 as predicted, the cost for a gallon of Canadian gas will be $5.00 in U.S. funds.
Gas in Whatcom County is now about $3.00 per gallon. Above the national average of $2.81 per gallon, but about the same price as gasoline in Seattle or Portland.
Point Roberts prices are significantly higher at $4.00 per gallon. (Gasoline in Point Roberts is priced in litres—yesterday it was between 97 and 99 cents per litre in U.S. funds)
Earlier this week, Market Fuel in Bellingham advertised gas at $2.74 per gallon. Other name brands, Chevron, Esso, Union 76 and Shell, posted prices for 87 octane regular at between $3.29 and $3.39 a gallon at their various locations in Bellingham and Whatcom County.
The ARCO station in Ferndale, just off I-5 and Slater Road, generally has the lowest prices for brand name gas.
I pulled in on Tuesday to fill up. The price on the sign was $2.99 a gallon. In the five minutes it took to pull off the freeway and pull up to the pump, the price on the sign had changed from $2.99 to $3.05.
No matter. Gas price fluctuations during the day are normal. That has been the situation in Canada for years. Gas is generally cheaper at night and more expensive during daylight hours. The fact that now the changes can happen every few minutes—rather than a few times a day—is just a sign of the times.
The cashier advised that the prices on the LED signs are controlled remotely by oil companies in the States. He smiled and told me, “I just take your money and turn on the pump.”
I admired his candor. Besides, I just came in to buy some gas, not to negotiate a price. So I just sighed, gave a primal shrug, paid up and drove away.
After all, it could be a lot worse. At least the cashier was polite and I could buy as much gas as I wanted.
I remember the Arab Oil Embargo in 1973. Back then, I had to line up for hours to purchase a limited amount of gas. Then there were the Odd-Even Days in Oregon, when I was restricted to buying gas every other day based on the number on my license plate.
Besides, oil is a wasting asset, millions of years in the making, extracted, refined and transported to a modern, safe dispensary for me to buy. That seems reasonable, given the alternatives. Like walking back to Point Roberts from Ferndale. Or hitchhiking.
Still, that $1.55 per litre/$6.20 a gallon price at Vancouver pumps is going to be increasingly hard for Vancouver drivers to swallow. The median household income in Vancouver is $76,000, vs. the Canadian average of $80,000. Another challenge when you live in the most expensive city in Canada.
Despite the outward indicia of prosperity, a lot of ordinary Vancouver citizens are just getting by. Many are struggling with mountains of consumer debt. Any significant jump in interest rates and gas prices would put more financial and emotional pressures on a lot of individuals and families.
The last time gas in Vancouver hit $1.50 per litre was in 2014. Since then, the price has been going down slowly and steadily. As long as pump prices hovered in the $1.25 per litre range, there was no public outcry.
However, at the current price of $6.20 per gallon, the cost to fill your 20 gallon tank in Vancouver will be $124 CDN.
In Whatcom County, that same fillup at $3.00 a gallon will cost you $60.00 U.S.
The price disparity between Canadian and American gasoline is the main reason the Point Roberts border is regularly clogged by motorists from the Lower Mainland “dipping down to the Point” for that “cheap American gas.”
The congestion will continue to worsen in the summer months. And it will continue to be a source of frustration for Americans living on the Point that have to put up with long border lineups to get to and from work, school, doctor’s appointments and the many other activities of life that are impossible to accomplish within the confines of Point Roberts. But they will have access to cheaper gas. Point Roberts has five gas bars—with over 100 pumps—for a resident population of 1300.
Just across the border in Tsawwassen, B.C, there are five stations to serve a resident population of 23,000.
What is driving prices higher? I remember paying $1.50 a litre in Canada in 2008 for a brief period. But world oil prices had recently hit $150 U.S. per barrel. This was the explanation given by oil companies and governments at the time. Many businesses passed the increased cost along to consumers as a “fuel surcharge.” Predictably, those same businesses and governments did not offer rebates to those surcharges when gas prices started going down.
Today, the world price of oil is $67 a barrel. Why are consumers paying the same price for a product that has dropped in value by over half in the past decade?
Price gouging from a greedy petroleum industry is the easiest explanation, but is that the default answer? Let alone the correct one?
How about the steady increases in Canadian taxes on petroleum? In 2015, gas taxes in Canada represented 35% of the pump price, depending on the province. In Vancouver, that figure rose to 41%, due in part to the 17 cent per gallon Transit Tax levied on gas sales in Vancouver and the Lower Mainland.
Additional taxes will follow. On Sunday, April 1, the first of (four) annual increases in British Columbia’s Carbon Tax added 1 cent per litre to the price of BC gasoline.
According to the Canadian Taxpayer’s Federation, when filling up a typical Toyota Camry sedan, $5.99 will go to carbon taxes. In addition, you have 10 cents per litre for Federal Excise Tax, 15 cents for Provincial Excise Tax, plus 2 cents for the Goods and Services Tax on the aforementioned Federal and Provincial Excise Taxes. This is also referred to as “the Tax on the Tax.”
The remainder of your dollar goes to the price of crude (22 cents) and the refining and marketing of gasoline (45 cents).
No one is advocating the complete removal of all taxes on Canadian gasoline. But if this were to happen, the price of a litre of Canadian gas would be about 75 cents, not $1.55.
Not all Canadian provinces support a Federal Carbon Tax. Some provinces have carbon taxes, or a variation thereof, already in place. Some do not. Saskatchewan has refused to tax carbon on a provincial level. The Maritime provinces (New Brunswick, Nova Scotia and Prince Edward Island) have been slow to embrace the idea of a federal carbon tax.
Little wonder. The Maritimes have traditionally been the “have not” provinces. Their citizens have less disposable income than the traditional “have” provinces of Ontario, Alberta, Quebec and British Columbia. Ontario has already imposed a provincial carbon tax on it’s citizens, but the new leader of the Conservative Party has recently come out against the carbon tax. The political tides are turning.
Many voters in Washington state say they support a carbon tax. And they will, until it starts to impact them every time they fill up their car. It may be politically correct to say you support saving the environment, but do you trust the government to have all the correct answers to deal with controlling greenhouse gas emissions? Particularly the federal government?
Support for a carbon tax may have broad support among the citizens of Washington and British Columbia, but it is not deep.
When the carbon tax chickens come home to roost in the form of higher prices at the gas pump, politicians on both sides of the border will be the first to change their flight plan. Or fly the coop.