A petroleum industry expert says plunging crude oil prices may be close to a bottom, meaning B.C. motorists shouldn’t expect gasoline prices to fall much further.
Metro Vancouver gas prices averaged $1.19 per litre Wednesday, down 17 per cent from their mid-summer plateau of around $1.42.
Jason Parent, vice-president of consulting for MJ Ervin and Associates, said there may be room for gasoline prices to drop a little more at the pumps as a result of crude’s fall, but not a huge amount.
“We’re talking two or three cents,” Parent said. “Generally I see retail gas prices hovering around where they are right now – plus or minus five cents – and then creep up a little more in the spring.”
Crude oil had run at more than US $100 a barrel for the first half of the year before falling 35 per cent to less than $70.
Crude’s decline turned into a nose dive last week when the OPEC cartel announced it wouldn’t cut production to prop up oil prices, creating the spectre of a global supply glut and protracted low prices that could force some energy firms out of business.
Some analysts have suggested crude oil could fall as low as $30 a barrel.
“I just don’t see that,” Parent said. “I’m of the opinion that while we may not be at the bottom in terms of crude prices, I think we’re getting pretty close to that range.”
Parent said it would take an “epic” drop in the price of crude below its current level for gas prices to drop below $1 a litre, particularly in Metro Vancouver, where TransLink’s fuel tax adds 17 cents.
“You guys are taxed more than anyone else in the country,” he said.
Parent said gasoline prices in Canada haven’t fallen as much as in the U.S. because of the decline in the Canadian dollar against the U.S. greenback.
|Vancouver Historical Gas Price Charts Provided by GasBuddy.com|