Eye-watering gasoline prices greeting drivers in the capital region and Lower Mainland are the result of refinery problems, not oil prices, analysts say.
The Sturgeon refinery in Edmonton has been shut down for an anticipated two months of maintenance since early August. The refinery makes diesel, as well as naptha, a component of high-octane gasoline, although diesel prices are actually down by about five cents per litre across the country.
But there have also been refinery issues and unexpected shutdowns in the U.S., including a major fire at a refinery in Ohio and a maintenance shutdown at a refinery in Ferndale, Washington, while a batched pipeline — the Olympic pipeline — serving refineries in the Pacific Northwest is down for maintenance, Dan McTeague of GasWizard said.
Global oil prices have been falling since July, but gasoline prices in Greater Victoria rose sharply late last week, from about $1.90 a litre to well over $2. On Tuesday, the price of regular gas in the capital region ranged from $2.10 to $2.15 per litre, according to the price-tracking website GasBuddy.com — still shy of the record $2.35 a litre seen on June 6.
Prices in Metro Vancouver shot up from about $1.95 last week to $2.20 per litre Saturday, then hit a record $2.33 per litre Sunday at some stations, though by the end of the day, some retail gas stations had lowered their prices to around $2.18 per litre.
There was still a wide range in prices Tuesday, ranging from $2.17 to $2.33 a litre. McTeague expects $2.33 a litre will be the typical price over the next few days.
Gasoline prices also shot up over the weekend in Alberta and Saskatchewan, as well as in Pacific Northwest states like Washington and California, which suggests the price spikes are a regional issue related to refining capacity. On Sunday, prices were up about 13 cents a litre in Calgary and Edmonton.
According to GasBuddy, Edmonton prices for regular gasoline ranged from $1.32 to $1.50 per litre on Tuesday.
It was a different story in Eastern ÎÚÑ»´«Ã½, where gas prices have dropped by about five cents a litre in cities like Toronto and Montreal.
McTeague said spot prices for gasoline in the U.S. Pacific Northwest are $4.24 per gallon US, something he’s never seen before. He added spot prices for California are $4.61 US per gallon.
Spot prices refer to prices for fuel that changes hands at a refinery or other major pricing hub for delivery.
At the beginning of September, spot prices for the U.S. Pacific Northwest in the U.S. were just $2.92 US per gallon, McTeague said.
Patrick De Haan, head petroleum analyst at GasBuddy, said in a statement that the slew of unexpected refinery disruptions in a short span of time that have caused wholesale gas prices to spike on the West Coast, Great Lakes and Prairies could also result in price spikes of another 10 to 20 cents per litre or more until issues are worked out.
“I don’t know that I’ve ever seen a wider gamut of price behaviours coast to coast in my career.”
De Haan also warned that as Tropical Storm Ian nears the U.S. coast, some refiners could see limited disruption.
Global oil prices spiked above $120 US per barrel between March and June, driving North American gasoline prices to record highs.
Starting in mid-July, however, prices began falling, partly in response to the release of strategic oil reserves in the U.S., with the North American benchmark, West Texas Intermediate, now sitting at $77 US per barrel — the lowest price since the beginning of January.
McTeague said British Columbians can expect to see gas prices start to drop by the end of this week as refineries and pipelines come back online.
— With a file from the ÎÚÑ»´«Ã½
