Tax rate causing drivers to fill up over the border - Burnaby expert

The price of gas has dropped this week, but we're still paying more to fuel up here than they are in eastern Canada.

This week, the average price of gas in Metro Vancouver dropped to $1.39, but that's still about five cents higher than the average cost in Toronto.

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With gas prices topping $1.50 per litre in Metro Vancouver in May, many are wanting to know who's to blame for the pain at the pump this summer.

Drivers hadn't seen prices that high since 2008, when gas briefly went above $1.50 per litre as crude oil jumped to over $140 per barrel.

In Vancouver, the average cost of gas in June was about 15 cents above what it was in June last year. In B.C. overall, residents were paying more than 27 cents above the national average of $1.27 last month, according to Gasbuddy.com.

Lindsay Meredith, marketing strategy professor in the faculty of business at Simon Fraser University, said the tax rate is what is pushing more drivers to head to the U.S., where the tax rate is much lower.

"The last time we saw a litre of gas in the $1.40 range, a barrel of crude was selling for $150," he said. "Today, that crude is selling down around $90 and yet we've got record-high gasoline prices, so clearly somebody's getting in there."

Jason Parent, an analyst at the Kent Group, a company that tracks gasoline prices in Canada, agreed the main reason prices at the pump are still higher than in eastern Canada, is the current provincial tax rate.

"Taxation is high in B.C. in general, and in the Vancouver region it is extremely high with additional transit taxes," he said. "Even if wholesale prices are the same across the country, Vancouver is still going to have one of, if not, the highest prices in Canada because of the difference in taxation."

Drivers in Metro Vancouver pay 41 cents in tax for every litre of gas, which includes carbon tax, TransLink tax, provincial motor fuel taxes and federal taxes. The carbon tax, as of July 1, went up from 5.56 cents to 6.67 cents per litre.

Parent said another reason for the spike last month was the temporary closure of BP's Cherry Point refinery in Washington.

That refinery closed in February after a fire, causing wholesale prices in the region to climb.

But the refinery is back in operation now, and Parent said drivers can expect to see prices at the pump continue to fall by a few more cents.

Whatever the reasons for the rising cost of gas, the consequences are dire, Meredith suggested, causing inflation in the price of transportation, food, services, and a drain on the local economy with consumers heading over the border, both to fuel up and to seek better prices on goods.

So is there anything drivers can do to mitigate the expense of driving these days?

Meredith said consumers will likely look to hybrid and electric vehicles in the long-term as an alternative to gasoline-powered transport.

For now, though, there are few alternatives to paying a premium for gasoline.

"There's always been talk and some consumers say, 'Well, we'll boycott,'" said Meredith. "But the bottom line is, sooner or later you're going to fill up the car with gas."

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