Quebec auto shops are feeling the pinch of rising costs this year due to the conflict in the Middle East. Daniel Proteau, co-owner of Pneus Loubier, says he sees a 10 per cent increase on the prices of tires. “We’re starting to see it now because we’re starting to get our orders in for the winter season,” Proteau said. At Merson Automotive, manager Celso Louro says in July his oil supplier increased the price by 30 per cent. “That was a tough pill to swallow,” Louro said. Economist Moshe Lander points to the conflict in the Strait of Hormuz as a key driver. He says the connection between the conflict and rising prices comes down to petrochemicals. “One of the main ingredients in tires is connected to petrochemicals and petrochemicals come from oil,” he said. Lander says if the situation in the Middle East improves, prices will come down quickly. “You can see things like gasoline prices drop almost instantaneously on signs of good news,” he said. Louro says his current oil supply will only last another month or two. For now, his business is absorbing the higher costs. But when it is time to buy new inventory, at a higher price, Louro says those extra costs could be passed on to consumers. “It affects the bottom line.”
