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Metro Vancouver gas prices headed to $2 in uncertainty over Ukraine


Sanctions on Russian oil exports over the unprovoked invasion of Ukraine squeeze already short fuel supplies setting local gas prices soaring.

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Skyrocketing gas prices that hit records touching 186.9 cents a litre across most of Metro Vancouver on Wednesday leave limousine company manager Kyle Seo with limited options with which to cope.

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“Our trip rates are controlled by (the Passenger Transportation Board), we are told we can charge a five-per-cent fuel surcharge,” Seo said, “so all we can do is just spend the expenses from our pocket.”

Gas prices had already risen 30 per cent over the last five months, Seo said, raising the cost of a round trip from Vancouver to Whistler, a common journey, to $90 in gas, compared with $70 last fall.

And if prices rise higher, “all we can do is pray for … less gas prices,” Seo said, although signs aren’t good for that to happen any time soon with sanctions against Russian oil exports, the world’s second-largest supply, taking hold.

Long-time petroleum analyst Dan McTeague estimated that after hitting a record 186.9 cents a litre Wednesday, prices would spike another seven cents to 193.9 Thursday and another seven cents to 200.9 cents Friday.

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“I can’t keep up, not with the media (interviews), but how quickly this thing is turning,” said McTeague, an analyst with the fuel-price forecasting website GasWizard.ca and president of Canadians for Affordable Energy, “and it could get even uglier in the shorter term.”

On Tuesday, Canada joined the sanctions against Russia barring the country’s oil imports, which was largely symbolic since Canada last bought oil from the country in 2019, but the price for North-Sea Brent crude oil, a key indicator, jumped 7.6 per cent to US$112 per barrel Wednesday.

“Sooner or later markets will find their true (level), but that will only happen when there is absolute certainty that there is alternative supplies out there,” McTeague said. “And right now, the world want’s more oil (but) there is less of it.”

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In the meantime, McTeague said the high prices will push up the cost of everything from food to farming, agriculture and forestry, and “even the cost of (producing) your electric vehicles are going to go through the roof.”

Film-industry location scout Sai Frame tries to maintain a more open-minded view about the high prices considering the reasons, though they do cut into the bottom line of the company he works for.

“I would feel guilty (complaining) that it was an impact on me when I know that there’s a lot of hardship going on in Ukraine as these fuel hikes are kind of a result of that,” said Frame.

“I hope it doesn’t go on much longer, because yes, it is definitely affecting our bottom line,” Frame said of his employer, Location Fixer, “but I’d have a guilty conscience over worrying too much about it.”

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Frame’s vehicle is a more fuel-efficient Ford Escape hybrid, but his job involves driving hours a day and he burns through a tank-and-a-half of gas per week. That costs $80 now, versus $65 last summer.

“Is it really slowing me down, no, because my job entails me to get to these locations,” Frame said. “I’ve got to keep doing that, that’s not really an option. We’ve got to pay more.”

Metro already struggled through weeks of fuel rationing at the end of last November when shipments were suspended on the Trans Mountain pipeline. Catastrophic storms and washouts forced its closure while crews shored up its right-of-way.

McTeague said Trans Mountain’s shipments are “pretty much back to normal” but the company is likely still catching-up with its delivery commitments from that interruption. And McTeague argued that Canada, with substantial reserves, has the potential to fill in some of the oil demand now, but “doesn’t have the takeaway capacity,” meaning additional pipelines, to help alleviate the short-term problem.

“The risk premium (in oil prices) is based on shutting down Vladimir Putin’s ability to finance the war in Ukraine, which means circumventing and preventing him from profiting from or at least exporting natural gas and oil,” McTeague said. “And this is going to be a long-term entanglement, even after the dust settles, should Russia decide to do the smart thing and get the hell out of (Ukraine.)”

depenner@postmedia.com

twitter.com/derrickpenner

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