The deep dive in crude oil prices in recent weeks has so far been slow to trickle down into lower gasoline prices.
But one petroleum industry expert predicts more relief from pain at the pumps is coming soon for Lower Mainland motorists.
“You guys are on the verge of a pretty sizable drop in the retail price there,” said Jason Parent, the Ontario-based vice-president of consulting for MJ Ervin and Associates.
He said the current average price of $1.30 per litre of regular gas in Metro Vancouver as of Friday – down from a midsummer plateau of around $1.42 – should continue to drop to $1.25 or lower.
Crude oil prices have fallen about 15 per cent from their July levels but the drop for retail gas has been barely eight per cent.
“We’ve seen some of that passed on at the pump but not quite all of it yet,” Parent said.
Crude oil makes up only about half of the cost of a litre of gas, but he said the sharp decline, plus the typical seasonal drop in gas prices as summer driving season ends, should translate into more savings for drivers.
“If you’ve got a sustained downward movement in crude prices – as we have – you will see that passed on for the most part, eventually.”
TransLink’s diesel bus fuel costs may also drop with lower crude oil prices.
Spokesperson Cheryl Ziola said it’s also possible lower gas prices will encourage more driving and result in TransLink collecting more fuel tax from the 17 cents a litre it levies, at least over the short term.
But cheaper gas can also cut into transit ridership if more passengers take their cars instead.
And Ziola cautioned trends of better fuel efficiency, slower growth in vehicle ownership and people driving less are forecast to continue to push down TransLink’s fuel tax revenue over the longer term.
|Vancouver Historical Gas Price Charts Provided by GasBuddy.com|