The document delivered on Friday morning provided a review of the distribution of fuel in the province and what Bruce Ralston, Minister of Jobs, Trade and Technology noted results in "unexplained higher gas prices for consumers, and potentially higher profits for oil and gas companies"
The Report explored a range of factors that contribute towards the pricing of gasoline in the province, as well as the scope of the distribution system that brings the product to refineries and then on to your local gas station.
Much of the focus for the report is related to the high cost of gasoline in the large urban centres on the Lower Mainland, with regional price setting finding that there is a different between Northern and Southern Markets in the province.
Northern BC wholesale prices are set based on wholesale gasoline prices in Edmonton while Southern BC wholesale prices are set based on available prices in U.S. markets, primarily the Pacific Northwest (PNW) spot price. Although over the long term these prices generally track the price of crude, they do not follow in lock step.
This methodology makes the southern BC wholesale prices particularly susceptible to price changes driven by supply shortages in the Western U.S. In addition, it exposes these prices to exchange rate risk. We examine the pricing methodology in Section 6 of this report.
Their findings did not offer any evidence towards collusion among the gas retailers of the region or the development of a cartel approach; nor did the report believe that the seasonal variations in supply and demand for gasoline contributed to the growing difference between retail and wholesale margins in BC and the rest of Canada.
The report also dipped a toe into the controversial Trans Mountain Pipeline discussion, noting that: If BC had to replace refined products that are currently supplied by the TMPL, there is inadequate infrastructure in BC to transport, receive, store and distribute large quantities of refined fuels from any market other than Alberta.
The report featured the participation of 11 registered intervenors, 83 correspondence on the theme, three independent consultants reports and over 3200 pages of evidence and transcript.
From the comments received, the strongest current of concern was the belief that some form of price gouging was taking place.
While they could not identify any stand out reason for the difference in pricing, the panel did outline what they believe should be the next steps in the process of review, offering up the potential for increased refinery capacity and other infrastructure elements in the province as some possible solutions.
As part of the panel report, the participants have called for a one month comment period, to allow for the participants of the inquiry to submit additional evidence relevant to questions posed in the governments Order in Council request for the report.
The Executive summary of the project can be reviewed here.
The full report is available here.
The BCUC also provided a timeline for their work including a full listing of all the documentation that was considered in the preparation of the report, which you can view here.
As noted previous, Bruce Ralston, the Minister of Jobs, Trade and Technology issued a very brief statement on Friday after the release of the report.
And while the Minister noted that British Columbians are paying $490 million a year more than they should be, there was no indication from Friday's notes as to what the next steps for the province may be, or when we will hear next on the topic.
For more items of note related to the Legislature see our archive page here.
Some of the reaction to the report from British Columbia's political observers can be found from our Victoria Viewpoints page of political blog D'Arcy McGee.
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