Gas in Metro Vancouver has broken the $2 per litre barrier. But should it have?

As if the pandemic, surging housing costs and five per cent inflation haven't already brought Metro Vancouveritesto their financial knees, the fourth horseman of the affordability apocalypse has arrived as gas breaksthrough the $2-per-litre barrier.

Yes, there was plenty of speculation the price at the pump was set to spike.But seeing the actual numbers lit up on station marquee Friday morning still felt like a slap in the face for the 98 per cent of drivers with acombustion engine vehicle.

It all has Marc Lee, senior economist with the Canadian Centre for Policy Alternatives, shaking his head. Because while it's true Russia's invasion of Ukraine caused knock-on effects for consumers of Russian petroleum, B.C. isn't one of them.

Most of what flows out of gas pumps in this province originates right next door in Alberta, according to Lee, with another big source being the Cherry Point Refinery in Washington State. Russian-imported oil does not feature heavilyin B.C. gas tanks.

For the most part, nothing substantial has changed in either of those places, Leesays, except for the degree to which consumers are getting hosed.

"Basically, the demand side of the equation is exactly the same as it was a year ago, and the supply side of the equation is exactly how it was a year ago. And yet somehow people are paying 50 per cent more for gasoline," he said.

"Companies are making massive, massive profits. And we just kind of let them get away with it, even though the oil that they're extracting from under the ground is a public resource."

Vijay Muralidharan, a senior consultant at energy analytics firm Kalibrate, says another factor for spiking gas prices is anxietyamong energy company executives.

While many factors go into the price of gasoline, the price of crude is the biggest one, so the worry that Russian crude may suddenly become unavailable is causing crude buyers to look elsewhere to ensure a dependable supply, even if it costs them more, he says.

"It freaks you out as a buyer,"Muralidharansaid. "Even if it doesn't happen, there'sparanoia, so you bid up to make sure your supply is there."

But Lee said the systemthat makes B.C. drivers buy gas priced according to the world oil market could be changed. After all, governments regulate other energy markets like hydro.

"We could regulate the price of gasoline and prevent these kinds of crazy fluctuations," he said.

"The B.C. Utilities Commission found just a few years ago that, guess what, oil and gas companies are gouging consumers to the tune of a half a billion dollars per year."

Earlier this week Provincial Energy Minister Bruce Ralston said B.C. will not cap gas prices.

"For the government to step into the private market and set prices and fix prices is a major, major step and has unintended consequences," said Ralston. "The gas companies could turn around and dry up supply and drive prices even higher."

It is a stance consistent with B.C. NDP policy since 2019, with agovernment report from that year concluding that"while the regulation of gasoline prices provides some price stability, research does not show it leads to lower prices for consumers."

Currently, Prince Edward Island, Newfoundland and Labrador, Nova Scotia, New Brunswick and Quebec regulate gas prices.

Bleak backdrop of climate change

Public dread over high gas prices is taking place against a bleak backdrop of climate change and the related wildfire, flooding and extreme heat disasters to hit B.C.

A United Nations report published earlier this week paints a dire picture of the state of the planet and all life forms if greenhouse gas emissions are not urgently cut, including those coming out of a tailpipe.

High gas prices and global warming are motivation to switch from fossil fuel burners to electric or zero emission vehicles, supply issues notwithstanding.

A poll by Abacus Data and Clean Energy Canada shows a majority of Canadians are keen to transition to electric cars and want the government to support their manufacturing and affordability.

Lee suggested another way to balance the scales in favour of consumers and the environment would be to charge oil companies an excess profits tax and redistribute the money back to the public and to zero emission initiatives.