- Since 2010, refinery margins in British Columbia have risen well above the Canadian average and are well above margins in other global markets.
- Higher than average refining margins have cost BC consumers roughly $2.7 billion since 2010. In contrast, the cost impact of the RLCFRR is likely 30 times smaller.
- Furthermore, the RLCFRR increased the supply of transportation energy during a period when pipeline capacity and refinery outages were pushing fuel prices higher.
This report is Navius Research’s second installment in a series of analyses exploring British Columbia’s (BC) Renewable and Low Carbon Fuel Regulation Requirement (RLCFRR). In our first report, we provided an overview of how the regulation works, its impact on greenhouse gas emissions, as well as its acceptance by the citizens of BC. In this document, we explain how analysing the net-revenue for petroleum refining (i.e. the refinery margin) in BC provides insights into the economic impact of the RLCFRR. Specifically, we discuss:
- The relative impact of the RLCFRR on the financial viability of petroleum refining for the BC market.
- The cost impact of the RLCFRR on refiners relative to the cost impact of refinery margins on consumers.
- The potential for the RLCFRR to improve the competition in the market for transportation energy, resulting in lower energy costs for consumers.
To learn more about this research, please contact Michael Wolinetz.
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