Why are B.C. gas prices surging when the province gets most of its gas from local refineries?
CBC
The price of gasoline at the retail level has hit record highs across the country this week, with drivers in British Columbia seeing prices soar past $2.10 per litre over the weekend.
Economists, fuel experts and politicians have agreed prices are rising because of Russia's invasion of Ukraine.
But B.C. gets most of its gasoline from Burnaby, Edmonton and Washington state — so why does supply from Russia matter?
Here's an explanation.
Gasoline is made from crude oil, the cost of which is determined globally. The cost is influenced by international supply and demand or geopolitical events.
Crude prices were already high before Russia invaded Ukraine but now, there's even more uncertainty around long-term supply since Russia is one of the largest producers of oil and gas in the world.
"It freaks you out as a buyer," said Vijay Muralidharan, a senior consultant at energy analytics firm Kalibrate. "Even if it doesn't happen, there's paranoia, so you bid up to make sure your supply is there."
The price per barrel of crude oil soared this week to levels not seen since 2014, hitting $130 US per barrel Monday before dropping closer to $120.
Most of the gasoline in B.C. comes from refineries in Burnaby, Edmonton and Washington state, but the selling price of the oil going into those refineries is still decided by the global market.
"We have one price of world oil, and that basically is the price we cannot escape from. So no matter how much we wish the prices are local, they're not," said Werner Antweiler, a professor at UBC's Sauder School of Economics.
Oil producers sell their products to refineries competitively, so if prices are up internationally, they'll be up locally.
Marc Lee, senior economist with the Canadian Centre for Policy Alternatives, said the cost is being passed onto the consumer.
"Companies are making massive, massive profits," he told CBC last week.
There are four main costs that make up the price of regular gasoline:
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