Gas in Ontario expected to fall to average price not seen since May

CTV National News: Happy Holidays at the pumps Bill Fortier reports on how an excess amount of gas and oil has created a joyous moment for drivers hoping to fill up their tanks.

The cost of gas is expected to roll back to an average price unseen since May in southern Ontario, one analyst says.

Dan McTeague, the president of Canadians for Affordable Energy, told CTV News Toronto that prices are set to dip below $2 per litre.

"We're on track to see gas prices potentially fall below the $2 a litre threshold on Sunday," McTeague said.

This would be the first time since the end of May the average gas price in Ontario dropped under the $2 mark.

On Wednesday, prices at the pump dropped three cents followed by another one cent reduction on Thursday. On tap for Friday, McTeague anticipates another three cent dip.

"Every time there are good job numbers or very high inflation numbers in the United States and in Canada, the response by markets is that this will inevitably bring higher interest rates. With higher interest rates, the perception is it'll weaken the demand for everything," McTeague explained.

In the short term, he said this is a gift to consumers. But lurking in the background is a fundamental shortage that needs to be addressed – the lack of supply.

"The bottom line is that I don't expect prices to recover. There is a lot of shock in the market right now."