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Metro Vancouver gas prices breaking records; how much higher can they go?

Last Updated Mar 22, 2018 at 1:29 pm PST

A gas pump in Metro Vancouver showing $1.559 per litre of regular fuel on March 22, 2018. (Mike Lloyd, NEWS 1130 Photo)
Summary

Price of gas hits all-time high of $1.559 in Metro Vancouver

Analyst now believes prices will hit $1.60 per litre before summer driving season starts

'Higher gas prices make us all a little bit poorer,' says economist

METRO VANCOUVER (NEWS 1130) – Remember those predictions that gas could hit the $1.60 mark this summer?

We heard from Dan McTeague with GasBuddy.com earlier this week, predicting just that. But now that the price of gas has now officially hit an all-time high in Metro Vancouver: $1.559 at many stations, he tells Breakfast Television on City he might have been wrong about his earlier predictions — and not in a good way.

“There isn’t much here that indicates the price will drop, which suggests that my prediction of $1.60 this summer… may have been too far down the road. It looks like it might happen a lot sooner than we think,” he says.

He says chronic shortage of gasoline in our region is being made worse by shutdowns at refineries in Washington state and the Olympic pipeline.

“That pipeline is really the proverbial aortic artery, if you will, of all gasoline for all refineries in Washington state. And, of course, when they have a tough time or they’re short of gasoline, we pay for it.”

He says it’s a problem that needs to be addressed by Victoria.

“If not, then consumers will continue to vote with their feet and make their way down to the United States, not just to buy gasoline but with the savings, buy other products — which in turn, has a terrible impact on the economy as a whole,” says McTeague.

McTeague believes prices won’t really go down much until October or November.

Is there a bright side for real estate?

Today’s $1.559 price per litre of regular surpasses the previous high of $1.557 set back in June 2014, but there are some who see the “gas tank half full.”

Ryan Berlin, an economist with Urban Futures in Vancouver, suggests there is a point of diminishing returns for some people moving further out of the Metro area to find cheaper housing.

“I think there is. I think for people living where they live now and working they work now, higher gas prices make us all a little bit poorer. But I think, over the long run, what we should see — if a high gas price environment prevails for the longer term — is for that to essentially be built into the prices of homes that are situated in neighbourhoods and communities that are a longer commute from where most of the jobs are. We are a long ways from that actually occurring, but I think we would see an adjustment in prices to some extent,” Berlin tells NEWS 1130.

“Another way to look at it is that higher gas prices could reduce the value of real estate in some of our suburban communities,” he says.

Planners have long made the case for developments that allow people to live, work and play in their own community, and Berlin says higher gas prices may help with that.

“I think at the margin, higher gas prices nudge people in the direction of wanting to be closer to work and closer to general services and community amenities so that they don’t have to spend as much to do the things that they are used to doing on a day-to-day basis. But I think there’s a lot of inertia in that regard already, where people are already moving towards lower car usage, going car-free, relying on public transit and bicycles,” he says.

“But we’ve been dealing with high prices — building it into our budgets — for many years. I think many people, on that basis, have made the decision to use their car less, to move to hybrids or electric, or to use public transportation. We’ll probably see more of that in the future. One unintended consequence of higher fuel prices is that it gives us the opportunity to spur a little bit of innovation and open people’s minds to alternatives.”

Berlin believes that as the price of fossil fuels increases, it creates an opportunity for other energy sources to be developed and brought into the mainstream.

“There’s possibly a happy ending to this in the long run. In the short run, I’m sure we are all just going to feel the pinch.”