Expect a pricey summer with rising energy costs: report
Esso's refinery in Dartmouth, N.S. is seen at dusk on Friday, Feb. 4, 2011. (Andrew Vaughan / THE CANADIAN PRESS)
CTV.ca News Staff
Published Friday, May 20, 2011 7:50PM EDT
Fuel prices in Canada will go up, and stay up, for the summer according to the National Energy Board.
In the organization's 2011 Summer Energy Outlook released Friday, the board said rising crude oil costs will drive up gas prices at the pumps.
The price of a barrel of crude oil will average between US$100 and $120 per barrel over the summer months, the board predicts. Last year the price ranged from $70 to $80 over the same period.
"Global crude oil prices have risen on account of geopolitical events that have affected exports, and created some uncertainty about future exports from the Middle East and other oil producing regions," the report states.
On Friday a barrel of crude for June delivery was selling for $98.44 on the New York Mercantile Exchange. The July contract was selling slightly higher at $98.93 per barrel.
On Friday the average price for a litre of gasoline in Canada was $1.28, but as crude prices rise, so too will the prices of gas and diesel, which are made from crude oil.
One year ago the Canadian average was closer to $1.02 per litre.
The National Energy Board predicted that natural gas prices should stay relatively stable, averaging in the range of $4 or $5 per 1,000 cubic feet.
Production is expected to stay relatively stable in coming months, meaning prices should follow suit.
"We've seen a record amount of horizontal wells drilled recently in North America's major shale gas formations," Gaetan Caron, CEO and Chair of the National Energy Board said in the release.
"This is why we are expecting stable natural gas production levels for 2011."
Electricity rates over the summer will vary from province to province. Already, prices have been fluctuating in some regions.
Nova Scotia saw a 6 per cent increase earlier this year, B.C. Hydro raised rates by 8 per cent and Ontario raised time-of-use and tiered rates by 4 and 6 per cent, respectively.
"These regulated rate increases reflect the higher cost of new electricity generation relative to existing generation," the report states.
Ontario is predicted to have lower rates over the summer as weather reports predict a cooler summer.
Alberta, on the other hand, is expected to see price increases due to a 5 per cent increase in demand compared to last year. Alberta's supply has also been crimped, with the closure of three coal-fired plants.