Investigation launched into fuel prices in Kamloops, Sea-to-Sky regions

The B.C. Utilities Commission (BCUC) is launching investigations into fuel pricing in the Kamloops and Sea-to-Sky regions, after long-standing concerns that drivers consistently pay more at the pump than motorists in neighbouring communities. 

The Kamloops investigation will focus on what appears to be higher gas prices in that city compared to other nearby communities, while the agency launched a separate inquiry into fuel prices in the Whistler corridor from Squamish to Mount Currie.

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The commission says it will request detailed data from local gas stations and fuel distributors, including information on fuel sales and margins, how gasoline and diesel prices are set, and why prices in Kamloops are often higher than in Kelowna, Vernon, Merritt and other nearby markets.

In the case of the Sea-To-Sky investigation, the commission says it will examine whether the region has become distinct from the larger Vancouver market and how that may affect pricing.

Kamloops councillors demanding answers

Kamloops Coun. Stephen Karpuk welcomed the announcement, saying he's hopeful the investigation will finally provide answers after years of complaints from residents.

He said Kamloops is a major fuel distribution hub, which makes the higher local prices difficult to explain.

"It doesn't make any sense logistically," Karpuk said.

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"I'm excited that we've got some action finally from the B.C. Utilities Commission." 

Karpuk said council first raised the issue with the province in March before asking the BCUC to investigate. However, he remains skeptical about whether an investigation will change prices.

"Honestly, no. I'm hoping ... we'll get some answers, because maybe there's something we don't understand about why gas is more expensive in Kamloops."

Analyst says global factors forcing prices to spike

Dan McTeague of Canadians for Affordable Energy, a group that monitors the cost of fuel for consumers, says pricing is generally transparent, and the picture may be complicated by local conditions. 

He said all retailers supplied from the Kamloops terminal generally pay the same wholesale price, plus taxes.

Regional differences — "the municipal taxes, the electricity to run their pumps, staff wages, overhead, mortgages, and whatnot" — are then factored in. 

McTeague said stations outside Kamloops may be pricing fuel below cost as part of aggressive local competition rather than Kamloops stations charging unusually high margins.

"Gas stations decide to get into gas war for whatever reason, might be supported by their supplier or refiner or what they call a 'jobber' and can offer gasoline below cost," he said.

McTeague added that wholesale gasoline prices are already climbing because of global factors and motorists shouldn't expect relief any time soon. 

He predicts pump prices will rise another four to five cents a litre over the weekend, with prices increasing by another 10 to 15 cents a litre by early August because of tightening global oil supplies and higher crude prices.