Motorists will be digging a little deeper soon because prices are heading up despite a gas war in Greater Victoria, says an industry analyst.
Pump prices on Wednesday ranged from $1.279 per litre for regular fuel at Costco in Langford to $1.459 at several locations in Victoria. Several others were selling at $1.299.
Service stations selling at $1.299 or less are losing money, said Dan McTeague, senior petroleum analyst at gaspricewizard.com.
“It’s a gas war, pure and simple,” he said. “It’s a real benefit to consumers.”
The average wholesale price for gasoline in the Greater Victoria market is 90 cents per litre when it arrives at fuel transfer terminals such as Hatch Point near Cobble Hill. Add on taxes, including the B.C. Transit tax and GST, and that moves the local wholesale cost to $1.33 or $1.34, he said.
Costco typically comes in lower than other stations in the capital region.
A single, stand-alone dealer could not sell for less than $1.40 and make money, McTeague said. A larger company with more than 100 stations in different locations, for example, would be in a better position to absorb losses in a community.
“I think you will see a lot of gas stations by [today] move to $1.459, if not by the weekend,” in Greater Victoria, McTeague said. The traditional operating margin for stations is 12 cents per litre, he said.
Prices peaked in the capital region in April and May, reaching $1.62.
This year has seen a “perfect storm” to spur electric vehicle sales, said Blair Qualey, president and chief executive of the New Car Dealers Association of B.C.
Rising gas prices and a new federal incentive, in addition to an existing B.C. incentive, combined to encourage sales as public interest in electric vehicles grows.
Today, combined federal and B.C. incentives can knock $8,000 off the price of an electric vehicle.
The New Car Dealers administers applications for the B.C. incentive. Between Jan. 1 and July 3, the association has handled out 9,000 applications for electric vehicle incentives, an increase from 2018, Qualey said. Of those, 5,500 were submitted in May and June.
The federal government announced in May that it would offer rebates of up to $5,000 toward the purchase of a new electric vehicle.
Incentives are needed to encourage sales as long as a price differential exists between electric vehicles and gasoline-driven vehicles, Qualey said.
The association is encouraging governments to continue offering incentives and supporting places to charge vehicles.
