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$1.40 for gas? Higher Vancouver prices likely here to stay: economist

Last Updated Feb 15, 2021 at 7:05 pm PDT

Gas Prices at a Chevron Station on Burrard Street in Vancouver on Monday February 15th, 2021.

You have may have had a case of 'sticker shock' if you had a look at the price of gas Monday

While local demand is on the rise, Antweiler says you can blame supply issues with OPEC nations for this latest increase

VANCOUVER (NEWS 1130) – It looks like life is returning to normal again, at least if the price at the pump is any indication.

Many gas stations in Metro Vancouver are charging $1.40 for a litre of regular Monday after months of lower prices during the pandemic.

Werner Antweiler, an economist at UBC Sauder School of Business, says demand is catching to normal levels up after pandemic-lows, but prices are driven by the Organization of the Petroleum Exporting Countries (OPEC).

“What’s really driving up the prices is supply, and that is an international situation,” he says, adding OPEC is coming out of a “price war” that it has been in for the last year.

“In particular, Saudi Arabia has actually reduced its output by over a million barrels a day. So the supply shortage that has been created by OPEC is really driving up prices,” he explains.

“They (OPEC) have decided to reduce the supply to drive up prices. They were bleeding and they decided to stop the bleeding by cutting supplies.

He says gas prices have been going up every year and it’s driven by OPEC and not the pandemic, so he doesn’t see prices going back down in a meaningful way anytime soon.

“For motorists, I think the only option to look at when dealing with this high gas prices is to look a future that is going to be electric because travelling electric per mile is going to be a whole lot cheaper than using gasoline. But that is a trend we’ll see in the coming decade.”