Oil: how low can it go?

With the price of oil hovering below $50 a barrel, Canadians are facing a double-edged sword.

Consumers are enjoying lower gas prices, but the long-term effects of a downturn in the Alberta Oilsands could end up hurting us all.

Pump prices in Kelowna dropped to 100.9 cents a litre on Friday, a welcome break. But why is the Okanagan still paying more than it should?

Motorists in Metro Vancouver are paying an average of 102.9, but some stations even dipped below a dollar during the day. That in spite of the region's hefty Translink tax of 17 cents per litre.

Part of that is the B.C. carbon tax of just under seven cents, but that still means Vancouverites are paying about eight cents a litre less than us.

And Kamloops is perennially cheaper than the Okanagan.

Gasbuddy.com listed the average price there as 89.9 cents. In Prince George, it's 87.9. In Calgary, 75.9.

Across the border in Washington state, $2.21 per U.S. gallon works out to about 69 cents a litre.

So what gives? Once again, the Okanagan gets the shaft.

This has been going on so long, people just expect it. But it doesn't make it right.

Meanwhile, the downside of cheap oil is its effect on the economy. Alberta Premier Jim Prentice has seen budget projections for the province swing from a $1.5-billion surplus to a $500-million deficit in just a couple of months. The federal government will be hit hard, too, meaning more belt tightening and budget cuts.

And the Okanagan is not immune. With about 5,000 Valley residents working in the oilpatch, the trickle down will be felt here as projects are deferred and workers laid off.

The Oilsands have been Canada's economic engine in recent years. But it's an expensive way to make fuel. At these prices, it's no longer a cost-effective proposition.

So, enjoy the low gas prices while you can. The lower it goes, the worse our economy will get.

Here's hoping for a happy medium.

— News Director Jon Manchester


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