In Calgary, regular unleaded gasoline has spiked to 136.9 cents per litre, and it’s expected to go even higher.
There are a couple of reasons why gas prices are climbing. Oil refineries are going into maintenance season, which happens twice yearly, in the spring and fall.
Refinery maintenance involves shutting down various units within a refinery so contractors can inspect, repair, and upgrade equipment and infrastructure.
Last year, almost 2.5 million barrels a day of refining capacity went offline for maintenance in the United States from September through December.
We Pay for Broken?
But the biggest cause for the price hike is a major unexpected shutdown at BP Whiting, the sixth largest refinery in the United States.
To Roger McKnight, Chief Petroleum Analyst with En-Pro International, “unexpected shutdown” is a fancy way of saying, “It’s broken.”
The BP Whiting facility is also one of the worst polluters in North America and released almost 3,600 pounds of pollutants into Lake Michigan in 2021.
Chicago and Michigan will feel the full brunt of the shutdown, but the effects are also felt here in Alberta.
McKnight says the BP Whiting refinery can process 280,000 barrels of Western Canadian Select a day.
Western Canadian Select is a type of heavy crude oil produced primarily in Alberta. It is also one of North America’s largest and cheapest heavy crudes.
Heavy crude oil can be used in boilers and very large diesel engines. Facilities like BP Whiting refine heavy crude oil into usable liquid fuels, such as the gasoline we use to fuel our cars.
Prices Going Up
The cheapest gas in the Calgary area can be found at the Tsuu’tina Costco, selling for 124.9 cents per litre.
According to McKnight, prices usually increase in mid-February and reach their highest point around mid-April because of maintenance.
But this year, he claims maintenance will be “longer and deeper,” so prices will increase even more.
Longer and more thorough maintenance could result from severe winter weather in the United States that caused about 15 percent of the Gulf Coast’s refining capacity to shut down.
The result is likely a heavy spring maintenance season.
Commercial Transport Hit Hard
The BP Whiting shutdown has been especially hard on truckers like Garry Mallhi, who rely on large amounts of fuel to keep their vehicles running.
“[Our] Pay is the same, but as gas prices and other things are going up…it’s really hard to keep up. Driving these big trucks and when you’re hauling anything, is affecting every single second to us,” said Mallhi.
Mallhi also mentioned that the diesel cost of his truck is even higher now.
“When I did pump it, that day it was $1.49, I think, so now today, $1.62, $1.63. Depending on the tanks, around 1,000 dollars,” he explained.
McKnight expects this increase in prices to last for at least six weeks. He predicts prices will increase by another five to eight cents per litre.
So, if you’re planning a trip or need to fill up your car, you should be prepared to spend more money than usual on gas for a while.
The price hike caused by the BP Whiting shutdown speaks to a bigger issue. It’s not costing oil companies more to produce a barrel of oil, so why do we have to pay extra because a foreign-owned, multi-billion dollar oil company like BP has to do some maintenance?
Why are hard-working Albertans like Mallhi forced to grit their teeth and bear it?
From abandoned wells to carbon capture credits, cleaning up after oil companies is something we know all too well in Alberta.
Until we hold oil companies like BP responsible for their actions, the industry will continue to take advantage of us.
