Before the Act

Gasoline & Diesel Prices Inquiry

On May 21, 2019, by Order in Council No. 254, the BC government directed the BCUC to conduct an inquiry, exploring factors that may be influencing gasoline and diesel prices in BC since 2015. The BCUC was also directed to provide advice to the BC government on the price of wholesale and retail gasoline and diesel in the province.

Inquiry Process

The BCUC conducted an independent, transparent and public process for the Inquiry. The Panel considered evidence filed by:

11

Registered interveners, including all major companies that have refining, wholesaling, and retail business in BC.

124

Letters of comment from the public and interested parties.

3

Reports prepared by two independent consultants.

Key Inquiry Findings

Following the comprehensive inquiry process, some of the Panel's key findings were:

  • There is an unexplained difference of 10 to 13 cents per litre in wholesale gasoline prices between Southern BC rack price and the Seattle spot price, its Pacific Northwest (PNW) cost comparator;
  • The PNW spot price, which is the most expensive 5% of gasoline imported supply sold in BC, is driving the price of all gasoline sold in the province. The price difference over time is shown in the graph below and is seen to be increasing since approximately 2015:
  • The wholesale market for gasoline in BC is not truly competitive with high market concentration levels, high barriers to entry, and their ability to influence prices. Retail market prices can also be controlled by five refiner-marketers;
  • There is no evidence to suggest that there is collusion among the retail operators nor is there evidence of cartel behaviour; and
  • Regulation could potentially reduce the wholesale and/or retail margins but may have unintended consequences. However, further investigation is required if such an approach is considered.

The Gasoline & Diesel Price in BC Inquiry Explained

Timeline of Events

  • May 2019
    The BCUC conducts an independent, transparent, and public inquiry on gasoline and diesel prices in BC, as requested by the BC government.
  • August 2019
    The BCUC issues its key findings after a comprehensive inquiry process. Evidence was reviewed from 11 registered interveners, all major oil and gas companies in BC, 73 letters of comment from the public, and three reports from two independent consultants.
  • September 2019
    Five interveners and 41 letters of comment from the public are received during a 30-day comment period for feedback on the Final Report.
  • November 2019
    The Supplementary Report considers and responds to submissions and comments made during the 30-day comment period.
  • November 2019
    In response to the BCUC's reports, the BC government introduces the Fuel Price Transparency Act (FPT Act) to require companies to report data on the market conditions involved in setting fuel prices in BC.
  • December 2019
    The FPT Act passes its readings in the legislature, receives royal decent and becomes law.