Key Takeaways:
- Canadians should expect a costly summer at the pump, with one analyst forecasting that a $2 per liter price tag will become the norm in many locations.
- According to McTeague, the price increase is partly due to the annual transition from winter to summer fuel, which raises prices.
As the cost of oil continues to rise, Canadians should expect a pricey summer at the pump, with one analyst predicting that a $2 per liter price tag might become commonplace in many areas.
The warning comes after months of record-high price swings, fueled by post-pandemic fuel demand and a drop in supply and exacerbated by Russian oil sanctions imposed in March.
While Canadians have been accustomed to dramatic price fluctuations in recent months, economists believe the Easter weekend price increases are paving the way for an even more erratic summer market.
For example, prices in the Greater Toronto Area (GTA) are expected to skyrocket on Saturday, rising from an average of $173.9 to $185.9 at most petrol stations—a 23-cent increase in just 72 hours.
Also read: As returning champion, a Canadian ‘Jeopardy!’ contestant enters the second week
“An increase of 23 cents per liter in the last 72 hours… “That’s a rate I’ve never seen before, it’s unheard of, and it doesn’t bode good for the summer,” Dan McTeague, president of Canadians for Affordable Energy, told CP24 on Friday.
According to McTeague, the increase is partly due to the transition from winter to summer fuel, which occurs once a year and normally raises prices.
Butane, which is less expensive to produce and ignites engines more quickly in cooler temperatures, is used in winter gasoline. Alkylates, more commonly found in premium gas, is used in summer blends.
This change often costs consumers an extra five to eight cents per liter.
“From April 15 to September 15, the type of gasoline you get tends to fluctuate.” It’s been around for over three decades. “There’s always a seven or eight-cent premium associated with it,” McTeague added, noting that locations like the GTA will likely have seen an average of $1.80 to $1.90 at the pumps over the summer months.
“Mark my words, $2 a liter will be seen on multiple days during the summer this year.”
According to McTeague, many reasons, including a weak Canadian dollar and decreased investment in traditional fuel sources, are increasing the price at the pump.
However, he adds that summer prices could skyrocket if there are any major global delays to gasoline production or delivery, such as cyclones or pipeline problems.
“We’ve entered a new age,” he declared. “The Canadian dollar isn’t responding to increasing oil prices because we’re not developing pipelines to markets that sorely need Canadian oil. We’ve piled on tax after-tax… all of these things are leading to a bad situation getting worse.”
Source: CTV News
Get Canada and Yukon’s top News, Market News, and other News of USA and worldwide only on yukonweekly.com
