If you filled up on Tuesday, count yourself lucky because the cost of fuel went up in a big way overnight. Gas at many stations across Calgary was listed at $1.85 per litre early Wednesday morning – about 35 cents more per litre more than Tuesday. “That is a huge gap and so it really reflects the volatility that’s happening right now,” said Richard Masson, a former CEO of the Alberta Petroleum Marketing Commission. Analysts say the shock wasn’t entirely unexpected, with oil prices hovering at about $100 per barrel and climbing further with the ongoing situation in the Middle East. The United Arab Emirates’ decision to exit OPEC hasn’t helped the situation either, given that the country is the organization’s third-largest producer. “When you have reduced supply and markets that are close together, they are all reacting in a hurry right now because the pressure on supply is so intense,” Masson said. About a fifth of the world’s oil flows through the Strait of Hormuz. Masson forecasts pressure on prices could persist due to the war in Iran, saying gas priced at $2 per litre could be on its way. “The world is losing more than 10 million, maybe 15 million barrels a day of oil production,” Masson said, adding that oil inventories are also declining. Moshe Lander an economics professor at Concordia University in Montreal, says many businesses were eating the cost, hoping the Strait’s closure was temporary. “They’ve now realized this is not ending anytime soon,” Lander said. He points to rising heating bills, jet fuel and other commodities and services impacted by increased gas prices. “Boats are going to add on surcharges as well,” Lander said. “Even if you’re not going for cruise season, boats are a major way of shipping goods from China, or from Europe and so it’s going to show up there as well.” Ottawa also introduced a temporary gas tax break last week — meant to save about 10 cents per litre — but rising oil prices have already erased that discount. “Under the program, the fuel tax is removed in full once the average oil price for a quarter’s review period reaches $90 a barrel or higher,” Marissa Warner, press secretary for Minister of Finance and President of Treasury Board, said in a statement.
