Gas prices dip below $1 per litre in Metro Vancouver and Fraser Valley

Gas prices in parts of Metro Vancouver and the Fraser Valley have dropped below $1 per litre as oil prices continue to decline due to global price wars and lower demand from consumers.

Drivers in Richmond reported prices dropping to 99.9 cents per litre for regular grade gasoline on Wednesday night, while the price aggregator website gasbuddy is reporting many gas stations in Abbotsford with prices below $1, including 94.9 cents a litre at one station on Thursday.

On Thursday night several gas stations in Vancouver droppedprices to 99.9 cents per litre.

Petroleum analyst Roger McKnight says the decline is a result of oil price wars and reduced demand from consumers as more people stay indoors due to COVID-19.

McKnight called the reduced demand the dark side of the equation.

"It's something that is out of the control of oil producers or governments at this point in time. It's trying to hit a ball that you can't see," said McKnight, who is the chief petroleum analyst with En-Pro International Inc.

"It's an absolute flood of oil, actually it's going to get to a point where there's nowhere to put it."

Drop tied to oil price declines

These double digit prices are a far cry from 2019 when prices peaked around $1.70 per litre and prompted Premier John Horgan to order an inquiry.

Lower prices at the pump are tied to the continuing decline of oil prices, which are, in part, a result of an oil price war between Russia and Saudi Arabia.

This week the price of West Texas Intermediate (WTI), the benchmark for a barrel of oil in North America, fell below $30 US.

McKnight says traditionally for every $1 drop in oil prices, consumers will see 60 cents of savings at the pump, but lately the cost of gasoline has been falling much faster than the price of crude oil.

"Anyone selling for less than a dollar in British Columbia is actually just losing money hand over fist," said McKnight.

And even though gas prices continue to fall across the country, McKnight says the sub-dollar prices aren't likely to last long.

"If it goes on for another month, I'd be astounded. If it goes on for another month, you might as well shut down the oil business in North America."