Achi news desk-
Drivers in Eastern Canada could see a spike in gas prices due to various factors, particularly the higher cost of the summer blend, industry analysts said.
Patrick De Haan, head of petroleum analysis at fuel-saving website GasBuddy in Chicago, predicts a big gas increase for eastern parts of Canada including Ontario, Quebec, Newfoundland and Labrador, New Brunswick and Nova Scotia over the next few days, while some areas in the Maritimes have already seen the increase.
“Unfortunately, for … a third of Canada really, we’re likely to see a big jump in what (motorists) see at the pump,” he said in a video interview with CTVNews.ca. “Gas prices could go up more than 10 cents a liter. That’s all about yesterday’s switch to summer gasoline.”
Gas prices may continue to increase for the next week or two, De Haan said. “But I think the end is near for the seasonal increases and we should start to see prices come down possibly by May (long weekend).”
Dan McTeague, president of Canadians for Affordable Energy, also predicts increases in gas prices.
Ontario and Quebec will see an increase of 14 per cent per liter overnight on Thursday, he said on Wednesday. It predicts the price per liter will rise to $1.79 in cities across Ontario, the highest since August 2, 2022. In Quebec, it expects the price per liter to increase to $1.88.
McTeague attributes the increase this week to the higher cost of summer blended gasoline.
Meanwhile, De Haan saw the following price changes across Canada compared to a week ago:
- Saskatchewan prices are flat;
- Manitoba prices are up about half a penny a litre;
- Alberta is down seven-tenths of a penny a litre;
- PEI is up about 1.2 cents per litre;
- BC is up about 2.5 cents a litre;
- Nova Scotia is up three cents a litre;
- Quebec is up 3.5 cents per litre;
- Ontario is up 4.5 cents per litre;
- New Brunswick is up five cents a litre;
- Newfoundland is up seven cents a litre.
Factors behind spikes
“Some gas stations have already raised their price, basically, but others may not for the next day or two,” said De Haan. “So over the next few days, the averages will continue to rise as more stations raise their price. … Most of the increase is happening right now in the eastern parts of Canada.”
The summer gas switch will have a “one-time only effect” on gas prices, De Haan said.
More drivers are on the road, creating increased demand for gas as temperatures warm, and refineries are finishing up maintenance before the start of the summer driving season. “While they’re doing that maintenance, they generally can’t supply as much gasoline to the market,” De Haan explained.
Despite tensions between Iran and Israel, the recent attack has had “little impact” on the price of oil, De Haan said.
“Last week, oil prices climbed to their highest level (in) six months as Iran hinted that it would attack Israel,” he said. “Now that those attacks have occurred and have largely been unsuccessful, the price of oil is actually going down.”
A third major spike in 2024
Michael Manjuris, professor and chair of global management studies at Toronto Metropolitan University, said the new gas price increase would be the third major increase in Canada since the start of the year.
One factor is that the price of crude oil worldwide has risen 15 percent since Jan. 1, Manjuris said.
The federal carbon tax increase of about 3.3 cents per liter on April 1 is also another reason for the large increase in gas prices, he added.
Although the switch to summer blend fuel usually happens every year, Manjuris said, it will be more painful economically because it is on top of two other big increases this year. “This increase will now cause the overall price of gasoline to be very high,” he said in a video interview with CTVNews.ca. “We haven’t seen these kinds of prices since 2022.”
Manjuris believes that gas prices will continue to rise through the summer as global demand for oil begins to grow. “That is because we are seeing more economic activity in China, in the United States and in Europe,” he explained. “When all those things come together, the price of crude oil starts to go up. … So I predict that because of the increased demand, the price of gasoline in Canada will also go up in months the summer. I’m going to suggest three to five cents a liter will be the peak before it starts to come back down.”
Regional differences
The West Coast and Prairies won’t have any gas price hikes soon because they’ve already transitioned to summer gasoline, De Haan said. “So this is something related to the change, which is happening last in the eastern parts of Canada,” he explained.
In addition, he said regions have “subtle differences” in their supplies of gasoline.
“Winter gasoline supplies in the eastern parts of Canada were a bit of a luxury and so discounts were significant,” he said. “But now that the eastern part of Canada is rolling over to relatively tight supplies of summer gasoline, this is something much more impactful. I mean, other areas in Canada did roll over to summer gasoline, but they didn’t necessarily have the big discounts that. we’ll link to the big change in prices we’re seeing.”
With files from CP24.com Journalist Codi Wilson
