Gas is more expensive in British Columbia in part because of the high price of land and credit card processing fees, according to a new report.
But the analysis – completed for the B.C. Utilities Commission by the Deetken Group – failed to explain a 1.4 cents difference between the province and elsewhere.
Looking at Vancouver, the report said that gas price margins are “highly correlated” with land values.
It explained: “Relatively high gasoline retail margins are likely to be a result, at least in part, of high land values in the Vancouver region.”
The report also focused on Kamloops, whose prices were compared – along with Vancouver – to Seattle and Edmonton’s.
Prices were found to be considerably cheaper in the latter cities because of:
Input costs
Transport costs
The regulatory environment
The competitive landscape
Another factor leading to higher gas prices is credit card processing fees.
The report explained: “This is due to the fact that processing fees are applied as a percentage of a total transaction, meaning that fees will be higher in jurisdictions (like the Vancouver area) where retail prices are already higher than surrounding areas.”
BC Premier John Horgan commissioned a public inquiry in May after the price of gas climbed above $1.70 a litre in the province.
To read the full report, click here.
