Achi news desk-
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Londoners are feeling the pain at the pumps this week, but don’t blame the recently raised federal carbon tax, says one analyst.
The price of regular unleaded gasoline shot up 14 cents a liter in Ontario this week, with average pump prices in London Friday morning at $1.736 a litre, just below the Ontario average of $1.739. Prices have increased by 18 cents per liter in the past month, up from $1.56 in March, according to Gasbuddy.com.
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Heather Rivers unpacks the reasons why.
WHY ARE GAS PRICES GOING UP?
Although the federal carbon tax rose from $65 per tonne to $80 per tonne on April 1, it is not to blame for spiraling gas prices in London and across Ontario.
“This week’s increase has little to do with the carbon tax – after rising at the start of April, it has been passed on for the last few weeks,” said Patrick De Hann, head of petroleum analysis. gasbuddy.com. “The increase we’re seeing across much of eastern Canada right now is related to seasonal changes. . . in the gasoline supply. “
Gas stations switch to cleaner gas every spring and summer, as mandated by the federal government, he said.
“Much of the rest of Canada had already made that transition and it varies from region to region,” said De Hann.
CAN PRICES GO DOWN?
Technically, yes. When there is an excess of petroleum on the market, discounts occur.
Big price jumps are much more noticeable this year because “an excess of gasoline in the winter led to discounts,” De Hann said.
“When transitions happen you may go from . . . a lavish supply of gasoline (winter), to a very tight supply of summer gasoline, which . . . was the case here,” he said. “That’s why there’s such a big jump in the price.”
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WHAT ELSE IS BUYING PRICES UP?
Crude oil prices reached $85 a barrel on April 3, the highest since October, according to media reports.
“About 90 to 95 percent of the increase you’ve been seeing at the gas pump this week is due to the change from winter to summer,” said De Hann. “The (rest) may be due to the fact that last week oil prices climbed to their highest since October.”
WHERE IS GAS CHEAPEST?
The lowest prices in the province can be found in Thunder Bay, where they hovered near $1.47 at one outlet, gasbuddy.com said.
WHAT ELSE DO USERS PAY FOR?
- GST and federal excise tax: 10 cents
- Provincial tax: about 15 cents
- Carbon tax: about 20 cents
- Retail margin: usually eight to 10 cents
- Refinement cost: About 30 percent of the total
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@HeatheratLFP
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