The NDP has pledged that new legislation its government introduced yesterday (November 18) will reveal the invisible hand of the market that dictates fuel prices in B.C.
"It's incredibly frustrating to watch the price of gas shoot up for no reason, and British Columbians are tired of feeling ripped off whenever they fill up their vehicles,” Minister of Jobs, Trade and Technology Bruce Ralston said quoted in a media release. "This legislation sends a message to oil and gas companies: the days of setting your prices in total secrecy have come to an end."
The Fuel Price Transparency Act (FTPA) will give the B.C. Utilities Commission (BCUC) powers to collect information from private oil and gas companies related to market conditions and factors that explain how companies set the prices that citizens pay for fuel.
"By pulling back the curtain, these companies will be publicly accountable for unfair markups and cost increases that cannot be explained," Ralston said. "It will also produce a common set of facts moving forward, allowing us to properly evaluate other policy measures to bring fairness to the price at the pump."
Through the spring of 2019, gas prices in many regions of B.C. hovered around $1.70 per litre.
The tabling of the Fuel Price Transparency Act follows the publication of a report by the BCUC that sought to explain why gas prices are higher in southern B.C. compared to most of the rest of Canada.
“The wholesale price of gasoline, which does not have fuel taxes, retail sales and carbon taxes added to it, had historically been 2.5-4 cents a litre more expansive in Vancouver than in Edmonton–which reasonably reflected the cost of transporting refined products from Edmonton to Vancouver,” reads a May 2019 letter that Premier John Horgan wrote announcing the investigation. “Starting about four years ago, however, this spread began to widen significantly, and over the past two months has exploded. So far this month, the gap is almost 24 cents a litre.”
The BCUC reported back last August and said it could not fully explain differences in prices.
Its authors—three BCUC commissioners—found that B.C. consumers are paying about $490 million per year more than could be explained. That’s the equivalent of about 13 cents per litre in wholesale gasoline prices.
"We cannot find a specific trigger in 2015 that would explain the beginning of this disconnect," the report states. "While there was a change in the Trans Mountain pipeline allocation methodology, its economic effect was muted until 2018."
The FPTC will establish a reporting framework that the provincial government says should bring transparency to the market.
“The FPTA will establish a regular schedule of reporting on the gasoline and diesel market, including: refined fuel imports and exports, including volume, source, destination and mode of transport; fuel volumes at refineries and terminals; and wholesale and retail prices,” the release reads. “Companies will have to report their data and could face fines or administrative penalties if they fail to do so.”