The BC government has introduced new legislation that will require oil and gas companies to report how gas prices are set.
Bill 42, the fuel price transparency act (FPTA), establishes a mandatory framework through which the B.C. Utilities Commission (BCUC) can collect information from oil and gas companies on the market conditions involved in setting gasoline prices.
Their findings will then be revealed to the public as well as to consumer and watchdog groups.
“It’s incredibly frustrating to watch the price of gas shoot up for no reason, and British Columbians are tired of feeling ripped off whenever they fill up their vehicles,” said Bruce Ralston, Minister of Jobs, Trade and Technology.
“This legislation sends a message to oil and gas companies: the days of setting your prices in total secrecy have come to an end.”
The act was created as a result of an investigation by the BCUC that found a lack of competition in the province’s gas market, including a 10- to 13-cent-per-litre premium that could not be explained by market conditions.
According to the Ministry, this premium costs British Columbians $490 million a year.
Higher gas prices
The utilities commission investigation was ordered by Premier John Horgan in May 2019 to determine the reasons why the province’s gas prices had skyrocketed in the two months leading up to it.
“Across the province, but particularly in Metro Vancouver and on Vancouver Island, people are alarmed at the rapid increase in the price at the pumps,” Horgan wrote to the BCUC back in May.
He said the price difference between the cost of gas in Vancouver and Edmonton had increased by nearly 5x the historical average since 2015.
“The wholesale price of gasoline, which does not have fuel taxes, retail sales, and carbon taxes added to it, had historically been 2.5 – 4 cents a litre more expensive in Vancouver than in Edmonton — which reasonably reflected the cost of transporting refined products from Edmonton to Vancouver,” reads the letter.
The legislation introduced on Monday November 18th will henceforth require companies to share data on refined fuel imports and exports, fuel volumes at refineries and terminals, as well as wholesale and retail prices.
Companies that fail to report their data could face fines or administrative penalties. The FPTA includes rules for audits and inspections to make sure that the information being reported is complete and accurate.
“By pulling back the curtain, these companies will be publicly accountable for unfair markups and cost increases that cannot be explained,” said Ralston.
“It will also produce a common set of facts moving forward, allowing us to properly evaluate other policy measures to bring fairness to the price at the pump.”