Metro Vancouver Gas: Here’s a breakdown of prices at the pump

There’s the price of crude oil, retail and refinery costs and, of course, taxes.

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Metro Vancouver drivers are used to paying a lot at the pump. The cost of filling up became a little more painful with the carbon tax increase, but there are plenty of other costs at play.

Gasoline, like any consumer product, has a supply chain. The price paid at the pump is made up of crude oil, but also refining charges and many taxes that are distributed to many entities.

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Here is a breakdown of the cost of regular gasoline in Metro Vancouver based on the price of approximately $2.08 cents per liter:

READ MORE: Gasoline trip calculator: How much do you spend on fuel each day?

Tax: 65 cents

Vancouver pays the highest gas taxes in Canada. This tax toll has steadily increased from 48 cents in 2016 to 60 cents in the first quarter of 2024, according to BC Public Service Commission data.

The taxes are made up of:

• Motor fuel tax: 1.75 cents goes to general revenue.

• Motor fuel tax: 6.75 cents It goes to the British Columbia Transportation Financing Authority, which is in charge of roads and other transportation infrastructure in the province.

• TransLink: 18.5 cents. This transit tax covers Metro north to Lions Bay, west including Bowen Island, south to the US-Canada border, and east including Langley, Maple Ridge and Pitt Meadows. In Victoria, drivers pay their own road tax of 5.5 cents per litre.

• Carbon tax: 17.61 cents. On April 1, 2024, the provincial carbon tax increased from $65 per tonne to $80 per tonne, translating to an additional 3.3 cents per liter.

• Federal excise tax: 10 cents. The federal government charges a flat rate of 10 cents per liter, which has been frozen since 1995.

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• GST: 9.9 cents. The five per cent federal goods and services tax is levied on crude oil, refining and retail costs, and other taxes, which the Canadian Taxpayers Federation has criticized as a “tax on a tax.”

Retail margin: 10 cents

This is the difference between the price at the pump, before taxes, minus the price the gas station paid for the fuel.

Dan McTeague, president of the advocacy group Canadians for Affordable Energy, says the retail margin has remained stable at around eight to 10 cents per liter for the past decade. And it’s not much.

“If you charge eight cents a liter, you better sell a lot of gasoline and a lot of jerky,” he said.

Gas stations have also been under increasing pressure due to higher taxes, wages and energy costs, and they bear the cost of loyalty programs, where customers earn points when they fill up, he added.

“This is really the last eight cents of competition. The other two dollars are already ready.”

Refinery margin: 43.3 cents

This is the difference between the amount a refiner pays for crude oil and the amount it sells its petroleum products on the wholesale market.

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While the refinery amount seems huge, a significant part of it is due to the exchange rate.

Like all commodities, crude oil is priced in U.S. dollars, whether it is refined in Canada or elsewhere, McTeague said. If the Canadian dollar is trading at par with the US dollar, the margin would be about 30 cents less.

Metro Vancouver gets about a third of its fuel from Burnaby’s Parkland refinery, which produces about 55,000 barrels per day. About half to two-thirds of the region’s gas comes by rail and pipeline from Alberta, with a small percentage sometimes coming from U.S. refineries.

McTeague estimates the cost of transporting fuel via the Trans Mountain pipeline from Edmonton to the British Columbia coast costs between three and seven cents per litre.

British Columbia Low Carbon Fuel Standard: 18 cents

British Columbia drivers are also paying what is also known as a “second carbon tax,” which is hidden in the wholesale price.

It’s a fee paid by fuel suppliers in British Columbia, who must purchase carbon credits to meet the province’s low-carbon fuel requirements, McTeague said.

Added to other taxes, the total tax would increase from 65 cents to 83 cents, or nearly 40 percent of the total gas bill.

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Crude oil prices: 71.5 cents

Driven by OPEC production cuts, global economic growth and geopolitical developments, including conflicts in the Middle East, the price of crude oil reached $85 a barrel on April 3, 2024, the highest level since October .

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