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Vancouver drivers are paying far more to gas companies than most Canadians, and skyrocketing fuel prices have put the B.C. government under pressure since April.

Jeff Vinnick/The Globe and Mail

Oil and gas companies supplying British Columbia’s fuel market will be required to disclose how prices at the pumps are set under proposed legislation introduced Monday.

“This legislation brings us greater transparency of the gas pumps and sends a message to the oil and gas companies that the days of setting your prices in secrecy are coming to an end,” Bruce Ralston, Minister of Jobs, Trade and Technology, told the legislature.

The reporting requirements are designed to ensure consumers know who is profiting at the pumps – a measure similar to the disclosure provided in Washington State.

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Mr. Ralston told reporters he hopes the public release of those details will encourage oil and gas companies to reduce markups that they can’t easily explain.

“We hope, but we’re not necessarily expecting, that sunlight being the best detergent, that it may have an impact upon the way in which prices are set," he said. "Oil companies, perhaps in response to public concerns, may take that as a message to moderate their prices.”

Vancouver drivers are paying far more to gas companies than most Canadians, and skyrocketing fuel prices have put the B.C. government under pressure since April, when the province hiked its carbon tax by one cent a litre – but prices at the gas pumps in Metro Vancouver jumped dramatically.

The government has faced calls from advocacy groups to direct the B.C. Utilities Commission, the province’s independent energy regulator, to control gas prices or provide some kind of tax relief to consumers. Instead, the government asked the BCUC to examine what factors have influenced gasoline and diesel prices in B.C. since 2015.

However, the BCUC was unable to extract a clear explanation from fuel suppliers about a gas-price difference of between 10 cents and 13 cents a litre between southern B.C. and other regions in the Pacific Northwest. A number of suppliers balked at producing evidence, citing the need for commercial confidentiality, and some of their explanations were contradictory.

Under the proposed Fuel Price Transparency Act, suppliers will be required to disclose to the BCUC just how they arrive at their prices. The BCUC will weigh the confidentiality arguments against the public interest before deciding what data it can make public.

Mr. Ralston said he expects public disclosure to begin early in the new year. What the government will do with that information, however, is still unclear.

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“We’ll see what the data suggests. So it’s premature to say that we will intervene in the market,” Mr. Ralston told reporters.

“We’re concerned about that unexplained, 13-cent gap," he added, but suppliers should also be concerned about growing frustration by consumers about rising gas prices. “I would hope that they would be considering the reaction of the public. Certainly it’s more intense than I can ever recall.”

A large part of the problem, however, is simply a matter of supply.

The Lower Mainland’s only refinery, the Parkland facility in Burnaby, cannot come close to meeting domestic demand. Parkland brings in 55,000 barrels of oil a day and from that produces gasoline, diesel and jet fuel. (Tidewater Midstream and Infrastructure in Prince George, the only other B.C. refinery, can process 12,000 barrels a day.) But British Columbians consume 214,000 barrels a day of refined petroleum products.

Most of the province’s supply comes from the Trans Mountain pipeline. About 10 per cent comes from U.S. refineries.

Dan McTeague, president of Canadians for Affordable Energy, has followed B.C.’s fuel prices for decades. He says a law requiring more disclosure by oil companies won’t fix high prices, but it may help distract the public from looking too closely at the government’s role in the price of gas.

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“Those people who think this is a solution may be sadly disappointed,” he predicted.

Mr. McTeague noted that a wide-open inquiry into gas prices would have likely pointed the finger back at government.

In the Vancouver area, the total provincial tax on each litre of gas is 34 cents. That includes almost nine cents for the carbon tax, but the largest share goes to pay for public transit – a 17-cent levy for TransLink, the transportation authority.

As well, Mr. McTeague added, the markup on fuel in B.C. includes the hidden costs of the province’s low-carbon fuel standards, which have, since 2010, gradually decreased the average carbon intensity of fuels sold in the province.

“The province’s unique standard of gasoline is a major part of the price discrepancy, so it’s a little rich that they refuse to take stock of the impact of that standard.”

Editor’s note: An earlier version of this article incorrectly said the refinery in Prince George is owned by Husky Oil. Husky Energy sold the refinery earlier in November to Tidewater Midstream and Infrastructure.
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