B.C. gas prices expected to spike over the weekend
Industry analysts say B.C. gas prices will jump this weekend as part of the fallout of Monday's explosion and fire at a major Chevron refinery in California.
The fire fouled the air in Richmond, CA, for hours and took away a sizeable chunk of the state's gas supply — and, in effect, B.C.'s.
Roger McKnight, a Canadian petroleum analyst with En-Pro, said California lost 12 per cent of its refining capacity and it can't easily replace the supply with other U.S. sources.
"Refineries west of the Rockies are really an island unto themselves because they don't have access to the Gulf Coast — what we call finished product pipelines, which is gasoline and diesel from the Gulf Coast."
He said some of the lost capacity will likely come from Washington State, but the overall drop in supply will drive up the wholesale price of gasoline everywhere on the West Coast.
"I would say you're probably looking at another six cents a litre pretty quickly," he said.
McKnight said that even though Vancouver has its own Chevron refinery, the North American Free Trade agreement rules dictate that Canadian prices can't be lower than those in the U.S.
He said the price spike in B.C. should be short-term and should last as long as the disruption in supply, which he expects could be a few weeks.
In February, a fire at the Cherry Point refinery in Washington State kept gas prices in Vancouver above $1.40 a litre for about four months.
On Friday, Chevron Canada's Vancouver spokesperson Deidre Reid said it's still unclear how long it will take for the California refinery to be repaired.
But, she said the refinery incident is not the only factor impacting prices in B.C. right now.
She said commodity prices were already rising before Monday's fire.
"I know prices in Metro Vancouver did go up about a cent a litre yesterday. The cost of crude oil, which is the main raw material to manufacture gasoline, has been increasing," she said.
"For example, West Texas intermediate crude oil, which is a benchmark we like to look at, has been up almost 13 per cent since June."
