What to Expect for Vancouver Gas Prices Following the Carbon Tax End

As Vancouver drivers gear up for a potential drop in fuel costs, many are eagerly anticipating the lifting of the carbon tax on gas this Tuesday. But just how much can motorists expect to save at the pump?

Currently, gas prices in Metro Vancouver are hovering in the $1.90s, and while you might think the cessation of the 17.6 cent per litre carbon tax would lead to an equivalent decrease, the recent upward trend in gas prices may complicate this expectation. According to Patrick De Haan, head of petroleum analysis at GasBuddy, the price at the pump could decrease by around 15 cents, but economic fluctuations and local refinery issues may also play a significant role.

“While we should see a notable dip, it may fall short of the full 17.6 cents due to rising oil prices—up nearly two-thirds of a percent on Monday,” De Haan noted. Additionally, disruptions in West Coast refineries have already pushed the price of gas in Vancouver up by about six cents per litre in the past week. Refinery troubles in California are affecting supply across British Columbia, Washington, and Oregon, contributing to higher prices across the board.

While De Haan expects a significant reduction in gas prices after the tax is lifted, he cautioned that fluctuations may continue due to these ongoing refinery complications. “Once prices go down, there’s a chance they could creep back up a few cents per litre, depending on how long these refinery issues continue,” he said.

Contrary to assumptions that gas companies might exploit the situation to raise prices, De Haan assured that competition will drive prices down. “In my nearly 20 years of experience, each time a government agency initiates a gasoline tax pause, we see that vast majority—around 99.8%—of the decrease is passed onto consumers. Gas stations will use this opportunity to competitively lower their prices, prompting others to follow suit,” De Haan explained.

However, he advised that not every gas station will immediately reflect the reduced prices at midnight. Some facilities may take longer due to older technology capabilities, which require manual adjustments to remove the carbon tax from their price listings.

Looking ahead, De Haan does not foresee regular gas prices breaching the $2 mark in Vancouver this summer. He mentioned that a potential full-scale trade war in the U.S. could lead to an economic slowdown, further reducing gas consumption and ultimately driving prices down. “Currently, we are already nine cents per litre below last year's prices in Vancouver, and with the carbon tax pause, we could see declines of over 20 cents per litre below last year,” said De Haan.

As a reminder, the federal consumer carbon tax across Canada is expected to be paused at midnight on April 1, coinciding with British Columbia’s elimination of its provincial carbon tax. Premier David Eby will also hold a press conference this Monday afternoon in Victoria to address the implications of this tax suspension.

For Vancouver motorists, this is a crucial moment where improvements in fuel affordability may pave the way for smoother drives ahead, but staying vigilant on market changes and potential refinery delays will remain key.