Which came first: the consistently high gas prices in Merritt or people willing to pay them?

That’s a question Merritt’s city council and Okanagan-Coquihalla MP Dan Albas sat down to talk about on Feb. 10 at a committee of the whole meeting.

Committee of the whole meetings are public and involve members of council, but council does not make any motions or decisions at them as it does at regular council meetings. At the meeting, Albas and councillors discussed how gas prices are set and potential reasons why prices in Merritt are typically higher than those in neighbouring communities.

Albas said four main components influence the price consumers pay at the pump: the price of the crude product (in B.C.’s case, bitumen from Alberta); refining costs; taxation at the provincial and federal levels; and local competition.

He said the introduction of Costco in Kamloops created a price war in that city that has driven the prices to be among the lowest consistently in the province.

“You’re seeing less and less independent operators now,” he said. “Not every community is going to be able to accommodate a Costco.” The individual business owner’s strategy also plays into the end price that users pay at the pump, he said.

However, in many cases, the prices at Merritt’s gas stations are set by head offices in larger centres and not by the station operators.

Albas said the local gas stations fall on a supply chain that’s international in scale and a bump anywhere along that line can raise or lower prices.

While the Fairness at the Pumps Act is a piece of federal legislation designed to ensure consumers get the quantity of gas they’re paying for, any further regulation of prices would fall under provincial jurisdiction.

He said the federal government’s jurisdiction over the issue comes into play via arm’s-length investigative bodies that can look into anti-competitive or anti-consumer behaviours such as collusion or price fixing.

The federal gas tax constitutes about 40 per cent of the total gas tax, while the other 60 per cent of the gas tax is provincial. Part of the federal portion of the gas tax is also redistributed to municipalities, and it was gas tax funding that was used to beautify Gasoline Alley several years ago.

The roles of different levels of government combined with fluctuating prices can make it difficult to pinpoint any long-term differences in prices in B.C., Albas said.

At the local level, Merritt Mayor Neil Menard said gas prices are a road block in council’s ‘buy local’ agenda. Coun. Kurt Christopherson said the gas prices are a two-way street: if corporations lower their prices in Merritt, more local people will support the stations here.

He said it’s a matter of corporations setting their prices to prioritize the local population over the travelling public.

Coun. Mike Goetz uses part of his report to council at regular council meetings to recite gas prices in communities around B.C.

“How does one community consistently miss the boat all the time?” he said.