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B.C. Drivers Cross Border To Fill Up Tanks More Cheaply

Almost a fifth of drivers in British Columbia have resorted to crossing the border into the United States just to fill up with cheaper gasoline, a poll by Research Co. has discovered.

In some parts of the province, the numbers were much higher.

“Two-in-five drivers who reside in the Fraser Valley (40%) say they have visited the United States only to get gas in the past year,” the president of Research Co., Mario Canseco, said. “They have been joined by one-in-five (21%) drivers in Metro Vancouver.”

Prices at the pump in British Columbia hit an all-time high earlier this year, which prompted a government inquiry into their fluctuations. As of November, there was still no explanation of the fluctuations.

In its report on the inquiry, the British Columbia Utilities Commission said it had found an unexplained difference” of some US$0.09 (C$0.13) per litre between southern British Columbia and the rest of the province.

"The higher price differentials cannot be explained by economic theory or justified by known factors in the market," said the commission’s chairman, David Morton, adding "They are higher than they would be expected under more competitive conditions." 

The price discrepancy added up to about US$372 million (C$490 million) annually for British Columbia drivers.

During its investigation into the problem, the BCUC approached the five biggest fuel retailers active in the province and gathered evidence presented by the companies and found that "Refiner marketers — including Parkland, Suncor, Shell, and Husky — have greater direct control over pricing in B.C.'s retail stations when compared to the Canadian average." The evidence, however, did not shed much light on the reasons for the price fluctuations.

It’s worth noting that the investigation did not look into fuel taxes but some attribute the price rise precisely to them. Even so, fuel taxes cannot account for the fluctuations that have seen many British Columbia drivers seek bargains and go to gas stations even if they don’t need to refuel only because prices have temporarily dropped.

By Irina Slav for Oilprice.com

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