TORONTO — After a surge in gas prices across Eastern Canada earlier this week, experts say costs at the pump could level off despite the typical high-demand period associated with this time of year.
As the cost of oil edged below US$80 per barrel this week, gas prices soared to around 164.9 cents per litre across much of Ontario on Wednesday.
The eight-cent jump was likely fuelled by the annual switchover to summer blends, which improves fuel efficiency in summer temperatures, but at an increased cost, said Roger McKnight, chief petroleum analyst at En-Pro International.
While that sticker shock may have had drivers fuming this week, McKnight said consumer behaviour may have also been a factor. He said prices usually rise heading into the summer as the weather improves and Canadians head on the road for weekend getaways.
But McKnight said this year could be an outlier, with inflation and the threat of a recession holding demand back. He called it a “state of flux” as analysts wait to see how the state of the economy will influence prices in the months ahead.
“We’re in a teeter-totter right now,” said McKnight.
“Gasoline prices are sort of the sacred cow. It doesn’t seem to matter how high the price goes, people will still got to get on the road unless there are other factors that are going to intimidate them to stay at home.”
He noted prices were already beginning to drop following the mid-week surge.
“I think we’re at that high spot now and prices will start to start to come down as refineries get back on stream coming out of their semi-annual shutdown,” McKnight said.
While gas prices in Ontario were sitting at around 158.7 cents per litre on Friday afternoon, they continued to linger above 165 cents per litre east of the province and as high as 182.4 cents in B.C., according to price-tracking website Gasbuddy.com.
Teresa Di Felice, assistant vice-president of government and community relations for the Canadian Automobile Association’s south central Ontario branch, said the lasting impacts of world events such as the Russia-Ukraine war are also still taking their toll on fuel prices.
“World events seem far away, but they impact us here at home,” she said.
“We’re still seeing unrest and more people are starting to drive again. Things are opening up in a way that they haven’t in the past, so things are starting to level off and go back to normal and when it comes to anything when demand is higher, it’s not surprising to see prices go up.”
Di Felice also highlighted the impact that extreme weather events could have on gas prices, noting refinery fires last summer caused by severe dryness wreaked havoc on gas distribution and supply chains.
“All of those things that impact a distribution channel, whether it’s flooding, or dryness and the ability for the work to refine and distribute gas are going to have an impact at some point down the road on gas prices,” she said.
This report by The Canadian Press was first published April 21, 2023.
