EDITORIAL: Oil companies have motorists over a barrel

One thing is for certain – gas prices will increase

Whether it’s an unseasonably mild winter, a changing stance on trade policy anywhere around the globe, or an explosion on the other side of the country – one thing is for certain. Gas prices are going to increase.

Industry officials are warning that a large explosion and fire at an oil refinery in New Brunswick could lead to higher gas prices in British Columbia. A massive blast at the Irving Refinery shook Saint John on Monday. The cause of the explosion is believed to be a malfunction in the refinery’s diesel treating unit.

But no matter the cause, the consequences are far more clear than the thick smoke that blanketed the New Brunswick city.

“A fire that caused undisclosed damage to the Irving refinery in Saint John, New Brunswick, Canada’s largest, has not yet been fully quantified by markets and comes in a period of lower demand and stronger inventories generally in the U.S. northeast,” said Dan McTeague, a senior petroleum analyst at GasBuddy. McTeague says the refinery fire comes at a time of lower demand and stronger inventories generally in the U.S. northeast.

“Nevertheless, a more thorough disclosure of damage to the refinery could yield concerns for supply and raise market prices should the plant’s 330,000 barrel a day output be curtailed for an extended period of time,” said McTeague. “Combined with a weaker Loonie due to the effects of pipeline constraints, motorists should look to higher pump prices generally in the weeks ahead.”

Drivers here on the Island have been repeatedly told that our gas is primarily supplied by the refinery in Cherry Point, Wash. – and we should pay little attention to issues on the other side of the country. But, of course, that’s only when those issues would lead to prices decline.

Don’t believe it? Consider this: The price of oil is currently about $74 a barrel, while the price at the pump sits at $1.39 a litre here in Greater Victoria. At its peak, oil prices reached $147 a barrel in late 2008. Gas prices at the time were $1.53.6 in the Capital Region, although oil prices alone would suggest the price should be closer to $2.75 a litre.

One of these days, someone in Ottawa is going to invest in a calculator and get to the bottom of this.

Just Posted

Overturned vessels, simulated smoke expected in Victoria harbour for Coast Guard exercise

Coast Guard and other first responders will be on the water from 1 - 4 p.m. Thursday

Timelapse shows Blue Morpho chrysalis morphing at Butterfly Gardens

One of many speices of butterlflies at the Buterfly Garden

Greater Victoria workforce gets older but also more diverse

By 2036, Greater Victoria will have roughly two workers for every person 65 years and older

Free blood type tattoo with donation draws crowds in Finland

One in two people is eligible and able to donate blood, but only one in 60 people actually do

Greater Victoria enjoys sunny first day of spring

Summer-like temperatures of 21 degrees hit Wednesday for first day of spring

After mosque attacks, New Zealand bans ‘military-style’ guns

The gunman killed 50 in a Christchurch mosque

Greater Victoria Wanted List for the week of March 19

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

POLL: When do you think the next major earthquake will hit Vancouver Island?

According to seismologists, Vancouver Island is overdue for a magnitude 7 earthquake.… Continue reading

Canucks hang on for 7-4 win over Senators

Horvat nets 2 for Vancouver

European, Canadian regulators to do own review of Boeing jet

Air Canada plans to remove the Boeing 737 Max from its schedule at least through July 1

Prime minister defends Liberal budget measures as sales effort gets underway

Conservatives under Andrew Scheer say it’s a spree funded by borrowing against the future

Mayor meets with B.C. health minister on homeless taxi transfers

Two homeless people were discharged from Surrey Memorial and sent to a Chilliwack shelter

B.C. lottery winner being sued by co-workers

They claim he owes them $200,000 each, in a lawsuit filed in B.C. Supreme Court in Vancouver

Teacher reprimanded for conduct towards special needs student

Alan Stephen Berry told vice principal he did not have time to use positive strategies

Most Read