Canadians aren't getting the full benefit of oil prices when they fill their cars with gasoline — and it's because of the tumbling loonie.

The Bank of Canada on Wednesday noted a counterintuitive phenomenon underway in its Monetary Policy Report.

Oil prices are more than a third cheaper than where they were this time last year, yet, "Pump prices are now actually up from a year ago," BMO economist Sal Guatieri said in a recent note on the subject.

Depending on the timeline involved, gasoline prices are up and down in the past 12 months, but in Canadian dollar terms at least, they're certainly not where one would imagine they'd be based, based on what oil has done.

"Although gasoline prices have declined," the central bank said, "they have not fallen as much as the reduction in crude oil prices would suggest."

So what gives?

"It's not an easy answer," GasBuddy's senior petroleum analyst, Dan McTeague, said in a recent interview with CBC News. "But a few factors are often overlooked."

Loonie's impact

The problem, from drivers' perspective, is one of supply and demand. Despite being one of the world's largest producers of crude oil, Canada for the most part ships it to U.S. refineries, where it is turned into usable products like diesel, heating oil, jet fuel — and gasoline.

Those refineries make money by buying crude oil at the lowest price available, and then selling the distillates they make from it — including gasoline — for the best price they can find.

Americans have responded to declining oil prices by driving more than they ever have before. That means refineries can charge higher prices for gasoline, because it's in such high demand.

"Demand is through the roof in the U.S. because oil prices are down," McTeague said. "Refineries can't keep up, so their profit margins are up too."

Factor in the lower purchasing power of the loonie — it's down by almost 20 per cent in the past 12 months — and it's bad news for Canadian drivers: Canadian oil companies are getting less money for the crude they export, but Canadians are paying more for finished oil products, thanks to the weak loonie coupled with record-high demand for a product that is priced in U.S. dollars.

It also doesn't help that four of 10 provinces have hiked their gasoline taxes over the past 12 months.

"As if it's not bad that we're losing jobs due to oil," McTeague says, "as if it's not bad enough we're taking a hit to our currency, now we're paying more for gas too."

Drivers, meanwhile, are less convinced that there's a rational explanation for gas prices in this country.

"We're being taken to the cleaners considering how low a barrel of oil costs these days," said Alan Mauch in Vancouver, where gas is still averaging over a dollar a litre even as it hovers below 70 cents in parts of Alberta, as he filled his tank this week.

"I think the oil companies are taking advantage of what we're used to as far as pricing is concerned and they're going to milk it for as long as they can."