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Oil and gas spending estimates adjusted lower as uncertainties persist

New forecasts show dramatically lower expectations for 2020 capital spending in the oil and gas sector both nationally and in Alberta, the province that produces 65% of the country’s natural gas and 82% of its oil.

The Canadian Association of Petroleum Producers now estimates that $23.3 billion will be spent in the oil and gas production sector in Canada this year, down from about $37 billion in its January forecast.

Producers have announced billions of dollars in budget cuts since the start of the year to cope with lower oil prices as global energy demand plummets due to measures taken to control the COVID-19 pandemic.

Its January prediction represented about a 6% increase over 2019, credited to new industry friendly policies in Alberta and Saskatchewan and growing optimism that export pipeline capacity would be added.

The Alberta Energy Regulator, meanwhile, estimates that oil and gas capital spending in the province this year will fall to between $14.1 billion and $16.4 billion as price uncertainties continue to hurt producer confidence.

In its energy outlook posted Monday, the regulator says capital spending fell by 31% in 2019 to $18.9 billion. It attributed the 2019 drop to uncertainties around energy policy, low energy prices and market access constraints.


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‘Immense amount of pain’ predicted for Canadian oilfield services sector

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Canada’s oilfield services sector is in for “an immense amount of pain” over at least the next year thanks to low North American oil and gas exploration activity amid a worldwide glut of cheap crude, according to a report from CIBC.

Drilling and well completion companies stand to suffer the most as producers will be reluctant to reverse cuts in spending and production linked to the COVID-19 pandemic and its affect on fuel demand, the analysts warn.

“There is no way to sugarcoat it. The oilfield services sector is in for an immense amount of pain over the balance of 2020 and into 2021,” the report says.

“This will be felt across the sector and while some sub-segments will be more impacted than others (i.e. drilling/completion services lines), no one will be immune, especially with the broad-based shut-ins of existing production.”

On Thursday, Calgary-based STEP Energy Services Ltd. was the latest oilfield service provider to report a series of measures to deal with sharply lower demand that began in mid-March.

The measures include job cuts, wage rollbacks, parked equipment and reduced capital spending in its hydraulic fracturing and coiled tubing well service operations in Canada and the U.S.

It is also seeking relief from its lenders because it could potentially breach its debt-to-adjusted-earnings covenants within the next two quarters, triggering a possible demand for immediate repayment of all amounts due.

“Volatile market conditions have created uncertainty for our clients and they have responded by announcing material reductions in capital expenditures and cancelled work programs,” said STEP in a statement.

“Natural gas prices have strengthened of late which could support additional work later in the year; however, this is not expected to offset the decline in demand for services from oil-directed work.”

In a note, analyst Ian Gillies of Stifle FirstEnergy said STEP’s results were in line with expectations, but the bank covenant warning is worrying for investors.

“The outlook for North American hydraulic fracturing remains extremely challenging due to the material uncertainty surrounding the global economy and crude prices,” he said.

The authors of the CIBC report said the services sector downturn is made worse by expectations of “a prolonged trough” in activity as demand for new oil and gas production is delayed by the need to draw down crude storage and as idled wells are reactivated.

It said shares in the services companies it covers are down between 15 and 70% since early March, some of which is justified by the cost of challenges to come, but some due to “indiscriminate selling” by spooked investors.

Ongoing equipment retirements are expected to allow the North American services sector to eventually match capacity with demand, it said.

At STEP, adjusted earnings before interest, taxes, depreciation and amortization fell by 12% to $22.8 million in the three months ended March 31, despite a 10% increase in consolidated revenue to $194 million.

It attributed the decrease to a $2.5 million provision for bad debt and $1.9 million in severance for unspecified workforce reductions in Canada and the United States.

Despite a recent rise in U.S. benchmark oil prices to above US$30 per barrel, STEP says it has further reduced its 2020 capital program to $15.5 million, down from $24 million previously and its initial plan of $47 million.

It reported a first-quarter net loss of $52.2 million, compared with a net loss of $600,000 for the same period in 2019, mainly due to $58.8 million in non-cash impairment charges against its Canadian well-fracturing assets.

Earlier this month, the PetroLMI Division of Energy Safety Canada reported more than 7,700 oil and gas sector jobs were lost in April compared with March, with 6,500 of the lost jobs from the oilfield services sector.

 


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Imperial Oil reports $188M loss as COVID-19 hits workers, slows work schedule

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CEO Brad Corson

Imperial Oil Ltd. is slowing or deferring maintenance work throughout its operations as it tries to ensure employee safety in the wake of a COVID-19 outbreak that has infected 83 workers at its Kearl oilsands mine in northern Alberta.

The Calgary-based company said Friday it will start a planned one-month maintenance shutdown of one of its two production trains at Kearl in a few days and extend it by an extra month to late June or early July to allow more distancing between workers.

The extension means production at Kearl will fall from the record average of 226,000 barrels per day in the first quarter – and 238,000 bpd in March – to about 150,000 bpd in the second quarter, CEO Brad Corson told a conference call on Friday.

“This allows us to progress at a more measured pace and greatly reduce the number of people we have working at site at any given time and without affecting the overall scope,” he said.

“It also allows us to complete the work at a time of likely low prices so we can have the asset fully up and running as and when prices recover.”

He said the company has also reduced the scope of maintenance at its Sarnia, Ont., refinery, will defer planned work at its Sarnia chemical plant and is postponing planned maintenance at its Nanicoke, Ont., and Strathcona (Edmonton) refineries until after this year.

Twenty-two of the Kearl workers stricken with the coronavirus have recovered and the others are being monitored or treated as necessary, Corson said.

Work at the project is continuing with enhanced physical distancing, cleaning and health screening, along with supplying face masks and moving fewer workers on transport airplanes and buses.

Kearl is owned by Imperial at 71% and its parent company, ExxonMobil, with 29%.

The record output at Kearl thanks to the introduction of supplemental ore crushers drove overall Imperial production to about 419,000 barrels of oil equivalent per day in the first three months of 2020, up from 388,000 boe/d in the same period last year.

Record throughput at its Strathcona refinery helped take its overall processing total to 383,000 barrels per day, the same as a year ago.

Corson said demand for jet fuel and gasoline fell significantly in March, while diesel demand dropped by a more moderate amount, due to measures taken to limit the pandemic. However, there are signs demand may be slowly recovering, he added.

Imperial reported a net loss of $188 million in the first quarter due to lower commodity prices and non-cash charges of $301 million, with $281 million of that due to a reduction in the value of its inventory as crude oil prices plunged in March and $20 million from a goodwill impairment.

It had a net profit of $293 million in the same quarter last year.

Fellow oilsands producers Husky Energy Inc. and Cenovus Energy Inc. both reported writedowns and losses earlier this week.

Imperial’s revenue and other income totalled $6.69 billion in the quarter, down from $7.98 billion in the first quarter of 2019.

Imperial’s average realized bitumen price averaged $18.08 per barrel in the first quarter of 2020, compared to $48.85 per barrel in the first quarter of 2019.

Crude-by-rail shipments averaged 97,000 bpd from its co-owned Edmonton rail terminal in the first quarter of 2020, up from 53,000 bpd in the fourth quarter of 2019.

Shipments by rail fell to about 10,000 bpd in April and are being phased out as pipeline space is freed up amid industry-wide production cutbacks due to current low oil prices, said Corson.

Analysts said Imperial beat their expectations on production and on cash flow, the latter thanks to higher profits from its refining and marketing sector.

Imperial cut its 2020 capital spending plan at the end of March by $500 million to between $1.1 billion and $1.2 billion and targeted a reduction in expenses by $500 million compared with 2019 levels in an effort to deal with impact of the pandemic.

 


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Gas retailers in Atlantic Canada forced to sell fuel at a loss

shutterstock_692687404Retailers in Atlantic Canada are struggling under the one-two punch of reduced business due to COVID-19 and gas price regulations.

Retail gasoline pricing is the region is unique to the rest of the country, as gas prices are regulated.

“Regulation is supposed to reduce price volatility, but in March when the economic effects of the COVID-19 pandemic coupled with the dire effects of the global oil price war between Russia and Saudi Arabia, the result was a rapid decrease in the regulated selling price of motor fuel,” the Convenience Industry Council of Canada said in a release. “As a result of steadily decreasing consumer demand, many retailers were carrying significant inventory. Each time the price of fuel was adjusted, the future for our retailers became yet more uncertain as the difference between the posted regulated price to consumers and the product cost to retailers continued to grow.”

In essence, Atlantic gas retailers were burdened with inventory that they purchased at a price much higher than what they could sell it for.

It’s estimated that Atlantic convenience gas stations are losing upwards of $14 and more on every fill up, or 20-25 cents per litre, until they could clear their inventory, according to CICC. “The total loss on fuel to each retailer in March was in the tens of thousands of dollars, on average. These are real losses because there is no pent up or deferred demand that can or will be made up down the road.”

While area retailers are accustomed to ups and downs throughout the year due to supply and pricing, it typically evens out in the end. However, more recent losses are unprecedented and represent a huge financial burden.

“We know many convenience gas retailers may not be able to absorb that financial hit and without help there could be business closures,” said CICC.

The industry association is working with CIPMA and the Atlantic Convenience Stores  Association to discuss the issue with provincial governments in the Atlantic region and come up with potential solutions that will help the nearly 2,500 convenience stores in the Atlantic region that sell gasoline.


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Price and location power gas sales: C-store IQ National Shopper Survey

What do people consider important when they are making a gasoline buying decision? We found out in the C-store IQ National Shopper Study from Convenience Store News Canada and OCTANE. The findings offered an in-depth examination of the convenience channel and were revealing. 

Screen Shot 2020-04-14 at 12.40.36 PMC-Store IQ is the first convenience and gas specific study that delves into the wants, needs, perspectives and habits of Canadian consumers. We surveyed more than 1,000 convenience shoppers across the country to bring our readers and our partners the insights and data necessary to better understand customers and achieve business success. 

With average visits to gas stations running 4.67 times a month, our study found that price and location were and continue to be the two biggest drivers when it comes to gasoline purchase decisions. When it comes to preferences younger generation shoppers visit c-stores much more often and would rather visit a c-store than purchase gas from a gas-only retailer when compared to older generations. This indicates a desire to make the most of weekly gas purchase trips either to buy daily staples or a quick meal.

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Millennials (6.8 X a month) report a much higher average number of gasoline ‘trips’ over a monthly period compared to Gen X (4.51 X a month) and baby boomers (3.65 X a month). And, while male to female gas purchase decisions showed an even split in c-store gas purchase decisions, more males (54%) than females (42%) were interested in buying fuel from gas-only retail sites.

We found that 47% of respondents were dedicated to gas-only sites. In turn, 34% bought fuel solely at c-store, 16% looked to warehouse clubs such as Costco and 12% looked to grocery and supermarket sites with gas for their fuel buys. Here, millennials (17%) were most likely to buy gas from a grocery/supermarket than older boomer (9%) generation shoppers.

 Price (74%) and location (64% ) continue to be the most important factors for shoppers when deciding where to purchase gasoline. Store appeal (34%) and store/gasoline brand (35%) were found to be much less influential. A convenient location is of higher importance to females (68%) compared to males (59%). Millennials (39%) rate store appeal as more important compared to boomers (31%).

 The bottom line is that a convenient location with additional services and a competitive price is the formula for gas sale success. Convenience, service and price bring in customers. What operators do to maximize this opportunity determines the overall business viability.

 


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Project deferral, oil prices troubling for N.L. economy during pandemic

Unknown-2The global COVID-19 pandemic is spelling trouble for Newfoundland and Labrador’s oil and gas industry, adding to existing economic challenges in the cash-strapped province.

Premier Dwight Ball acknowledged last week the province is experiencing “tough times,” referencing deferred investment on projects and historic lows in oil prices.

Equinor and Husky Energy announced the decision to defer the Bay du Nord offshore development project due to falling oil prices and economic downturn as countries respond to the novel coronavirus.

A statement from Equinor Canada says planning on the project will continue with adjusted timelines.

The project in the Flemish Pass Basin, about 500 kilometres east of St. John’s, was announced in 2018 but not yet officially sanctioned. Equinor had set a target of 2020 to decide.

The Bay du Nord project was expected to deliver first oil by 2025. It was a key part of the province’s plan to rapidly increase offshore oil and gasdevelopment, including a goal to double production to more than 650,000 barrels a day by 2030.

Natural Resources Minister Siobhan Coady said the news is disappointing, but she said it’s a positive sign that the project is deferred rather than cancelled during such a tumultuous time.

“These are difficult times, there’s no doubt, and it was difficult to hear that they’re deferring their decision,” Coady said by phone. “I remain kind of optimistic that things will move into a better place as we move forward.”

She said she remains encouraged by exploration ongoing in the province’s offshore.

Ball urged the federal government to take quick action on financial support for provinces on Wednesday but said Ottawa should not respond with a one-size-fits-all approach.

“My message to the federal government is, it’s urgent to get this money moving,” Ball said on Wednesday.

Larry Short, a chartered professional accountant who owns an investment firm in St. John’s, said the situation adds up to a “body blow” for the province’s finances.

“All the bad parts of the Bible have been delivered upon the province, and all the same time,” Short said by phone Thursday.

Short pointed to the immediacy of the COVID-19 crisis, the billions over-budget Muskrat Falls hydro project that accounts for a third of the province’s debt and the oil price collapse as serious challenges to the province’s budget that can’t be ignored much longer.

“We’ve got three major problems here that have suddenly come home to roost, and the province is going to have to really struggle to get through them over the next period of time,” he said.

He said the effects may not be seen until the government tables its budget, likely in the summer after a Liberal Party election set for May that will determine the new party leader and premier.

But with the federal government experiencing financial difficulties of its own, including major blows to Alberta’s oil-reliant economy, Short said Ottawa won’t be in a position to assist Newfoundland and Labrador financially as it normally would.

While prices are being hit hard right now by barrels of cheap oil from Russia and Saudi Arabia, he said Newfoundland and Labrador’s offshore might be left standing as a profitable and desirable drilling site once prices rise again, as the industry is less susceptible to disruptions like pipeline project delays.


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COVID-19: 5 ways to safeguard workers and customers

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Cleanliness is next to godliness, especially in the face of this COVID-19 pandemic. C-stores, gas stations and car washes can do their part to help keep the population healthy with a few simple steps.

1 – Talk to staff about the seriousness of the situation and the need to take special efforts to safeguard both workers and customers. Health authorities indicate the virus can live on surfaces for a few hours and up to several days.

2 – Have cleaning solutions and tools ready. According to Public Health Ontario (www.publichealthontario.ca) many commonly used cleaners and disinfectants are effective against COVID-19. Use only disinfectants that have a Drug Identification Number (DIN) and follow manufacturers’ instructions.

3 – Establish a cleaning routine and follow it. Clean and disinfect frequently touched surfaces at least twice per day. These include dispenser nozzles, payment buttons, squeegee handles, fuel selector switches and trash receptacles. Pay attention to door handles and light switches to the c-store and wipe all counters and cooler doors with a disinfectant. Bathrooms need to be a constant focus and all surfaces need to be disinfected repeatedly throughout the day. Wipe and clean all vending systems as well.

4 – Staff safety is important. Make sure crews have disposable latex gloves if they are detailing cars and discuss the importance of keeping hands away from faces. Gloves should be discarded into a lined receptacle after each vehicle is cleaned. If reusable gloves are used make sure they are only used for a specific task.

5 – Know your cleaning products.

Cleaners: These break down grease and remove organic material from the surface. Cleaners can be used separately before using disinfectants and can be purchased with cleaner and disinfectant combined in a single product.

Disinfectants: These have chemicals that kill most germs and are typically used after surfaces have been cleaned. These have a Drug Identification Number (DIN).

Disinfectant wipes: These have combined cleaners and disinfectants in one solution. Disinfectant wipes may become dry due to fast-drying properties and should be discarded if they become dry and are not recommended for heavily soiled surfaces.

Bleach solution: 5 tablespoons (1/3rd cup) bleach per five litres of water or 4 teaspoons bleach per litre of water.

RELATED READ: Prevention training video for operators and staff


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Oil price crash: What it means for Canada’s fuel prices?

esso_bearspaw_thumbWorld oil prices are in free fall after Saudi Arabia slashed its crude sale price Sunday, signalling the start of a price war after OPEC talks with Russia broke down without an agreement on production cuts. The threat of increased crude supply, on top of prices already weakened over fears the global outbreak of a novel coronavirus would lead to lower fuel consumption, triggered the crash. The turmoil is already affecting Canadian companies and consumers.

What does it mean for fuel prices?

Lower oil prices usually mean lower prices at the pump for drivers, although consumers should expect a lag before they see cheaper gas. Refineries work their way through inventories purchased at higher prices before the price drop. Despite the advent of carbon taxes, the price of oil is still the largest component in the price per litre of gasoline, diesel and other fuels, so drivers will eventually notice the drop.

How does it affect Canadian oil prices?

Crude oil is traded on a global market so when oil prices fall in New York or London, they also fall in Edmonton. Heavy-oil benchmark Western Canadian Select is a blend of made of oilsands bitumen and light oil that allows for better pipeline flow. Unlike other commodities, WCS futures are based on the price difference with U.S. benchmarks and therefore reflect changes in those prices. On the other hand, world oil trade is conducted in U.S. dollars, so the plunging loonie will help mitigate the effect of lower oil prices in Canada.

How does this affect Canadian oil and gas companies?

Lower commodity price forecasts are already causing producers to cut spending and payouts to their shareholders. On Friday, Vermilion Energy Inc. halved its dividend. The day before, Canadian Natural Resources Ltd. trimmed $100 million from its 2020 capital spending budget and said it could cut another $300 million to $400 million if market turmoil continues. Lower oil price forecasts were partly blamed for the recent shelving of the $20.6-billion Frontier oilsands mining project by developer Teck Resources Ltd.

How does this affect investors in the stock market?

Energy companies were among the hardest hit Monday on the Toronto Stock Exchange, with Cenovus Energy Inc. and MEG Energy Corp. each down more than 40 per cent in early afternoon trading. Heavily weighted Enbridge Inc. dropped 13.1%. The TSX energy subindex, which tracks the market value of Canada’s largest oil and gas companies, dropped sharply, trading as low as 29.6% below its Friday close. Energy has the second highest weighting of any sector on the TSX, at 15.9%, so a drop in energy stock prices drags down the index.

How will lower crude prices affect the Canadian economy?

Globally, Canada is the fourth-largest producer and fourth-largest exporter of oil and the energy sector accounts for more than 11 per cent of its gross domestic product. That means lower prices are a “huge negative” for the country, says Sherry Cooper, chief economist for Dominion Lending Centres. The scale of the economic hit will depend on how long lower prices persist, she says.

 


Photos: Chantale Lecours

Crevier Group’s new wash site in Beloeil, Que. offers efficiency and quality

Not long after he was named VP of Crevier Group’s fuel division in early 2018, Jean-Claude Clément was tasked with choosing a vehicle car wash system for the company’s showcase service station off exit 112 on Highway 20 in Beloeil, Que., a 20-minute drive east of Montreal.

“To make such a decision you need to consider many things to make sure the system you choose is right for the business,” says Clément. “You need to look at the area and market profile, the type of traffic and the location.”

Crevier Group operates 220 service stations across Quebec and distributes petroleum products, notably Chevron, in seven Canadian provinces.

Photos: Chantale Lecours

Photos: Chantale Lecours

In the end, Clément opted for a touchless LaserWash 360 Plus from PDQ for the company’s new Beloeil site, a system he became familiar with during the 22 years he spent building and running Pétro-T’s network of 150 service stations across Quebec. 

“I’d bought several earlier generations of that model and they always worked well,” recalls Clément, who left Pétro-T in 2015.“It’s a reliable car wash that we thought offered the right mix of efficiency and quality for the Beloeil site.”  

Impressive development

Screen Shot 2020-01-07 at 12.58.28 PMIn operation since July 2019, the new car wash and four-island gas bar are part of an ambitious plan by local promoters to develop the entire 1-million-sq.-ft. site into a multi-functional commercial, entertainment and residential oasis within commuting distance of downtown Montreal.

 

Dubbed the Faubourg du Richelieu, the $125-million project by Groupe Lobato involves the construction by 2021 of commercial and office space, a 100-room hotel and convention centre, a water park, a sports facility (including an indoor soccer field), residential condos and the project’s pièce de résistance—a marina on the historic Richelieu River. Deals have also been inked with Tim Hortons and A&W. To date, only the Crevier service station, a 99-slip marina and several condos are built on the land, which is still mostly greenfield.

However, work is to begin soon on 400 parking spaces conveniently located adjacent to the wash site. The spots are expected to be in heavy demand starting in January 2021 when Montreal’s Louis-Hippolyte Lafontaine Bridge-Tunnel, which runs over and beneath the St. Lawrence River in the city’s east end, will close for repairs for one year.  

 “Commuter traffic on Highway 20 will be backed-up right to our door,” says Clément.  “I’m sure many people will decide to simply park their cars here and take the bus. Having 400 cars here every day will be good for our gas and wash business.”

Screen Shot 2020-01-07 at 12.58.18 PMThe Crevier service station is one of four that the company operates within a few kilometres of one another on both sides of the river. Of those sites, the Beloeil location is the only one with a convenience store and a universal fast charge superstation for electric vehicles (EV). 

The fast charging station is one of 10 that Crevier operates at service centres across Quebec in conjunction with Electric Circuit, Canada’s first public charging network for electric vehicles, which offers 240-volt and 400-volt charging stations in the parking lots of partners in Quebec and Eastern Ontario. Crevier’s Beloeil station is the first with rapid charge facilities, which recharge most cars to 80% in only 20 minutes.

 “EV is getting big in Quebec,” says Clement. “That’s why we are working to install them at every station in our network whenever we renovate or build new.”

Site meshes with business plan

Screen Shot 2020-01-07 at 12.58.40 PMClement says that Crevier was “in no rush” to build a car wash in the first phase of the Beloeil site—plans originally included the gas pumps and EV charging station, plus a well-stocked convenience store.

But, his hiring and being tasked with finding the right car wash system for the site dovetailed with Crevier’s increasing interest in the retail side of its service station network. “We used to be more focused on the sale of petroleum products,” says Clément.  “But our model has changed over the past four or five years.”

With the addition of the Beloeil car wash, Crevier now operates five automatic washes, including four in Quebec and one in the Eastern Ontario border town of Hawkesbury.  

They are all different makes and models and include both touch and touchless equipment. “We’ve got a bit of everything,” says Clément.

“We went for simplicity, we didn’t add any extra features or gadgets like Lava Baths or Armor All,” he says of installing the LaserWash 360 Plus at Beloeil.  “We went for a standard format where people can choose between three kinds of wash—regular wash, wash with wax and super wash, where we put three-colour foam on vehicles, which puts on a nice show.”

 In the spirit of keeping it simple, there are no apps; instead customers can pay at the pump or inside. 

 Clément suggests it is too early to know if Quebec’s famously cold and snowy winters—coupled with the notoriously strong winds that whip across Beloeil and its low-lying, farm-rich St. Lawrence Plain region—will be a problem for the new wash.

“Bad weather shouldn’t be a challenge,” says Clément. “Car washes are built for winters. The entrances and exits are heated, as are the cement pads, which are heated when electronic sensors detect a risk of freezing. Those heat-active systems should help to avoid any ice buildup.”

He expects the same solid performance from the new wash in Beloeil as the earlier generation models he installed years ago for Petro-T.  

“These are solidly constructed systems that respond to our needs, which are providing an acceptable wash at the best price/quality ratio for both purchase and operation,” says Clément.  “I’d make the same choice again today.”
Originally published in the November/December issue of Octane. 


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B.C. introduces gas price transparency law forcing companies to reveal data

gas-pumpIt’s time to reveal to drivers in British Columbia how the price of gasoline is set, says provincial cabinet minister Bruce Ralston.

If passed, legislation introduced Monday would legally force oil and gas companies to make known how gas prices are set.

Ralston, the jobs, trade and technology minister, told the legislature the bill is in response to a recent investigation by the B.C. Utilities Commission, which found “considerable markups on the price of gasoline.”

Premier John Horgan tasked the independent utilities commission to examine fuel prices in the province as gasoline costs in Metro Vancouver were consistently the highest in Canada, reaching $1.70 per litre and above.

In a report released last August and a follow-up one issued last week, the commission said it couldn’t explain why B.C. drivers pay about 13 centres more per litre for gas than residents in similar jurisdictions.

Ralston said the Fuel Price Transparency Act would allow the commission to collect information from fuel companies on market conditions involved in setting prices.

“This legislation brings us greater transparency at 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.”

No one from the Canadian Fuels Association, the voice of transportation fuels industry in Canada, was immediately available to comment on the proposed legislation.

The association said in a statement in May 2018 in reaction to volatile gas prices that the rising demand for gasoline and a decrease in supply through the Trans Mountain pipeline have created a greater reliance on fuel imports using higher-cost transportation modes.

It noted that Vancouver had much higher tax rates on fuels than elsewhere in North America, by nearly 50 cents per litre.

The association joined the Petroleum Marketers Association in commissioning a report on gas pricing fluctuations in B.C., and submitted it to the commission last July.

The report says demand for petroleum products in the province exceeds supply while capacity to produce them has remained stable, resulting in B.C. relying on Alberta or other jurisdictions for growing demand.

Ralston said if the legislation passes, the information would be available to the public as well as consumer and watchdog groups.

The unexplained premium results in residents and businesses in B.C. paying an extra $490 million every year for fuel, Ralston said.

The goal, he said, is to improve public confidence and competitiveness in the fuel market and perhaps lead to lower and more predictable gas prices for drivers in B.C.

“It’s time to pull back the curtain to get some answers for British Columbians on how the price of gasoline is set.”