‘Trump factor’ could cause gas price volatility this summer, analyst says

A gas station north of Newcastle, Ont. gasoline and diesel per litre prices on Tuesday, April 1, 2025. THE CANADIAN PRESS/Doug Ives

CALGARY — The May long weekend is when gasoline prices tend to start levelling off ahead of the high-demand summer driving season.

But one thing may throw a wrench in long-held expectations about gas price behaviour this year, said Roger McKnight, chief petroleum analyst with En-Pro International.

“We have another factor in the equation that’s called the Trump factor, which has thrown any logical mathematical explanation completely out the window because it really depends on what he says, what we think he’s going to say or what he may never say,” he said.

In January and February, refineries go down for maintenance to switch over to producing summer fuels, usually raising prices until they peak around mid-April, McKnight said.

What prices consumers see at the pump now might be what they get for the warmer months, but the utterings of U.S. President Donald Trump on tariffs and geopolitical issues may jolt the market in either direction, he said.

The effects of the federal consumer carbon levy’s demise seem to be holding after Prime Minister Mark Carney did away with the charge on April 1.

The levy equated to 17.6 cents per litre of gasoline, and McKnight said pump prices remain about 15 cents per litre lower than before the change took effect.

He added that refineries are running at about 90 per cent capacity, which is low for this time of year.

“The driving season is right around the corner, but the refining margins are so, so poor that the refiner is saying, ‘Heck, we’re just going to hold back ... if we are not making good money on the stuff we’re making,”’ he said.

“That may support higher prices throughout the summer, but I can’t see anything drastic happening unless there is a geopolitical mess that we can never get out of.”

The price of crude oil, the raw product used to make gasoline and diesel, has been weak lately.

West Texas Intermediate, a U.S. benchmark for light oil, has been hovering around the US$60-per-barrel mark in recent weeks, about US$10 lower than it was just six months ago.

The Canadian Fuels Association, citing 2023 data from Kalibrate Canada Inc., said crude oil represents about 42 per cent of the pump price, with taxes, refining, distribution and marketing making up the rest.

Price-tracking website Gasbuddy.com pegged the national average for a litre of unleaded gasoline at 139.9 cents on Friday afternoon, up 8.6 cents from a week ago, but down 24 cents from the same day last year.

This report by The Canadian Press was first published May 16, 2025.

Lauren Krugel, The Canadian Press