WATCH: Prices have dropped a bit on Vancouver Island but nowhere near as much as they’ve fallen on the Lower Mainland. One expert says retailers here are to blame.
Drivers are seeing lower prices at the pumps, but an analyst says the price should be down up to seven cents-per-litre more.
The price of regular gasoline has dropped to as low as 144.9 cents/L, with many others coming down to 146.9 cents/L, which is a three cent decline from the point most were at in the last week.
Just a few weeks ago, the price to fill up your vehicle with regular gasoline was around 161.9 cents/L.
Dan McTeague of GasBuddy.com says Victoria and Island retailers are not quite giving back their retail margins, though, partly since they are still dealing with inventory which was much more expensive.
But McTeague says consumers are entitled to another price drop of about seven cents/L in the next week.
“The difference is retailers are picking up a bigger slice of the pie, if you will, of the retail margin and at this point it looks like 17-18-cents-per-litre,” McTeague says
“I think they’re going to have to consider dropping those retail margins very soon, because it’s becoming quite obvious when you have a higher tax jurisdiction like Vancouver, with such higher taxes on their gasoline. The real difference in Victoria is only about four, four-and-a-half cents. We should be $1.40, not $1.46 or $1.47.”
Gas prices in Vancouver took a sharp decline, going below $1.30/L at some stations.
Although prices have climbed back up around $1.40/L, it is still below many stations on Vancouver Island.
But McTeague says when gas prices spike in B.C., there is typically a two week lag on Vancouver, either up or down.
“Gas stations are left with inventory that that may be two weeks old or a week-and-a-half old, so when those prices begin to fall in the markets, they’re left with much more expensive gasoline in their reservoirs,” McTeague says.
“They’re not going to sell it at cut-throat prices or they might put themselves, ironically, out of business.”
McTeague says prices may continue to decline further as the market is focused on the effects of an escalating trade war between the United States and China.
“As long as that goes on there’s no real ground for food or energy prices to rally. Right now the great concern is the longer-term effect of escalating trade tensions would lead to a global economic slowdown, which in turn would damage or destroy demand. And that’s why so many traders are surrendering value of energy.”