Gas prices hit three-year high in parts of Canada
Josh Elliott, CTVNews.ca
Published Thursday, April 24, 2014 8:55AM EDT
Last Updated Thursday, April 24, 2014 9:45AM EDT
The cost of gas is at a three-year high in parts of the country today, and it could go higher, meaning the pain at the pumps isn't over yet for Canadians.
"This is as high as it goes for now," industry-watcher Dan McTeague told CTV's Canada AM early Thursday.
McTeague, a former MP who now runs the website tomorrowsgaspricestoday.com, said the recent spike in prices is higher than the increase typically seen at this time of year.
Gas prices now hover as much as 22 cents higher than they were in April of last year.
Toronto, Fredericton and Saint John all broke the $1.40 barrier overnight as prices climbed across the country.
McTeague says gas prices have nothing to do with a shortage in crude oil. "We have never seen this much oil in the system," he says. The oil inventory in the United States is at an 83-year high, according to McTeague, and there's no push to bring that inventory down.
While the rise is due in part to refiners' costs as they transition to summertime gas production, as well as a weak Canadian dollar, and overseas conflict, McTeague says "excessive speculation" in the energy market is a key factor.
"We're seeing the geopolitical situation in the Ukraine as sort of a catalyst for keeping these crude prices up," he says. "I suspect that if the situation escalates, prices will go up. If it de-escalates, look for those prices to plummet."
The price of a barrel of crude oil has gone from $93.90 on this day last year to $112.20 today, according to tomorrowsgaspricestoday.com.
McTeague believes gas prices are nearing a peak, and anything above where they are now will leave refiners with product no one can afford to buy.
"We've sort of reached an impasse right now where hedgers and oil companies and those pricing on the street are saying ‘I think we've gone as far as we can go right now,'" he says.
Some cities are already seeing relief, however. Regina's prices dropped 5 cents overnight, Quebec City's gas went down 4 cents and Saskatoon drivers saw a 1-cent decline.
Commuters in Montreal were paying the most for gas on Wednesday, but after a 2-cent drop, Vancouver is now Canada's most expensive place to fuel up.
McTeague says Vancouver and Montreal have the highest prices because of additional gas taxes.
Winnipeg has some of the lowest prices in the country. McTeague says that's because grocery store gas stations are putting the squeeze on retailers by selling their gas at wholesale prices. "Retailers are taking an absolute beating," he says. "They have no retail margin. A couple of box stores have come in and decided they're going to sell gasoline with no margin at all and recover that at the grocery checkout."
Here's a look at Thursday's reported gas prices across the country, according to McTeague's tomorrowsgaspricestoday.com.
- Victoria – 142.9 cents a litre
- Vancouver – 151.7 cents a litre
- Calgary – 128.9 cents a litre
- Edmonton – 125.9 cents a litre
- Regina – 128.9 cents a litre
- Saskatoon – 132.9 cents a litre
- Winnipeg – 127.9 cents a litre
- Toronto – 140.3 cents a litre
- Ottawa – 139.3 cents a litre
- Montreal – 151.4 cents a litre
- Quebec City – 141.4 cents a litre
- Fredericton – 140.5 cents a litre
- Moncton – 140.5 cents a litre
- Saint John, NB – 140.5 cents a litre
- Charlottetown – 139.7 cents a litre
- Halifax – 143.3 cents a litre
- St. John’s – 147.3 cents a litre