Gas prices in Greater Victoria could hit a new record high as early as Tuesday afternoon, according to a petroleum industry analyst.
Citing the continued stress on availabile supply in the Pacific Northwest due to refinery maintenance and accidents, GasBuddy senior analyst Dan McTeague said he expects a litre of regular gas could hit $1.699 by Tuesday afternoon in the capital region.
“The march to $1.70 is driven by refinery upsets in California and two key refineries that supply the market here — the BP refinery at Cherry Point and the Shell refinery at Anacortes — between these two there’s been a crimp in the supply picture in the Pacific Northwest,” he said.
That shortage forced fuel wholesalers to buy on the open market, but due to the production issues in California, open-market fuel prices have increased considerably.
On Monday, Vancouver took a hit as the price at the pump reached $1.729 per litre for regular fuel.
McTeague said it’s only a matter of time before Victoria see its own jump. Prices Monday afternoon averaged $1.617 around the region, down from the record of $1.649 set earlier this month.
McTeague said fuel in Victoria is generally more expensive than Vancouver because of the cost of barging and storing.
“But retailers in Victoria have been suppressing a good portion of their margin, they are not charging the full 12 cents of margin like Vancouver,” he said. “The cost to buy gas today is about $1.59 per litre and (Victoria retailers) are selling at $1.61. That barely covers the cost of honouring a credit card.”
It’s also not sustainable, and McTeague warns drivers there’s a wild ride ahead, given a U.S. embargo on Iranian oil is set to take effect.
McTeague said the embargo, coupled with reduced production and output problems in some oil-producing nations, will result in a global shortage.
“I think we have yet to see the full impact of higher prices due to global cuts in oil supplies. No one can turn a valve on in one minute to suddenly supplement what will be two million barrels lost per day,” he said. “That could leave the world short on oil which would cause gas prices to shoot through the roof.”
McTeague said, unfortunately, his January prediction is coming true — that 2019 would be a year of extreme volatility and likely the most expensive year at the fuel pump since 2014.