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British Columbia launches probe into high gasoline prices

British Columbia is set to investigate the reasons behind gasoline prices in Canada's westernmost province that are the highest in the nation.

Premier John Horgan gave the British Columbia Utilities Commission the authority to hear broad, high-level testimony into pump prices that could include compelling oil company executives to appear before the regulator. The rise in gas prices in the province is "alarming, increasingly out of line with the rest of Canada, and people in B.C. deserve answers," Horgan said in a May 21 statement outlining the probe.

Prices for regular unleaded fuel in British Columbia's populous Lower Mainland region have hovered around C$1.70 per liter for several months, or about US$4.80 per gallon.

Pump prices in the region have been inflamed by a number of factors including British Columbia's steep municipal and provincial taxes. Turnarounds at refineries in Washington and a local refinery in Burnaby, British Columbia, have also put fuel supplies at a premium. The province receives most of its refined products from Alberta via Trans Mountain Corp.'s pipeline system. Horgan's government and municipalities have worked to thwart an expansion of that network, although the premier recently suggested that Alberta refiners should increase their output to reduce fuel costs.

"We asked the [utilities commission] to conduct a fair, transparent and comprehensive independent investigation," Horgan said. "These terms provide the broad reach it needs to find answers and give recommendations to inform the path forward."

Among other issues, the investigation will look at regional differences in refining margins across Canada. The government claims that in recent months, refining margins for Vancouver, the province's biggest city, were more than double the Canadian average. Suncor Energy Inc.'s Petro-Canada, Royal Dutch Shell PLC, Exxon Mobil Corp.'s Imperial Oil Ltd., and Husky Energy Inc. are British Columbia's top fuel sellers. Alberta-based Parkland Industries Ltd. owns one of the province's two small refineries and a retail fuel network.

In addition to federal and provincial levies applied in other provinces, fuel prices in Vancouver include 17 Canadian cents per liter for a regional public transit system, an emissions levy of 8.8 cents per liter and a fee of 6.8 cents per liter for the British Columbia Transportation Financing Authority. Federal and provincial sales taxes are applied after the regional levies. British Columbia also has a renewable fuels requirement that refiners are obligated to meet, which adds cost to retail gasoline.