A Canadian expert on gas prices predicts that we’ll be feeling even more pain at the pump in the very near future.
Dan McTeague is the president of Canadians For Affordable Energy. He says there is more than one factor at play behind B.C.’s recent sharp rise in prices.
“The first one is well known: oil and gas prices were steadily rising in the United States in concert with the rollout of vaccinations and better economic news with respects to demand.”
He said that’s why, in January, oil prices rose from $45 to $59 per barrel for West Texas intermediate.
More recently, the winter storms that crippled much of Texas resulted in a jump in demand.
“With 40 percent of oil production offline, and about a third of U.S. refineries having been affected by the cold snap, it really left them in a quandary. The issue became for most, a question of why did the prices rise so quickly?” McTeague said.
“Well, shortage of supply in the United States is primarily responsible for last week’s five-to-six cents per litre wholesale increase at the pumps.”
McTeague says fewer taxes on gas has given drivers in places like the Comox Valley, Campbell River, Duncan, Powell River, and Port Hardy a bit of relief.
“Rather than dealing with $1.45 (per litre) in Vancouver, here you have a difference of about 10 cents per litre as you do for the rest of the province,” McTeague said.
“It sounds terrible but $1.30, $1.31 is not extraordinary especially given the overall taxation of gasoline in the province which runs to about 33.4 cents a litre plus GST, so as prices go higher, the impact of higher taxes tend to be more widely felt.”
Looking ahead, McTeague predicts March to be a “wait-and-see month” but believes the floodgates may just open in April “for two or three reasons.”
One of them, he says, is Canada’s COVID-19 vaccination rollout ramping up.
“I think Canada’s vaccination rollout will potentially lead to greater demand, and a restoration of normal and perhaps a bit of pent-up demand being satisfied in the early stages of spring and summer,” McTeague said.
He also suspects the province will “resume its trajectory” of driving up the price of all fossil fuels, diesel, and gasoline by restoring its 2.3 cent-per-litre increase in carbon taxes.
“And then of course you have the four cent per litre increase, traditionally, towards the end of March into the first few days of April where the transition from winter to summer gasoline tends to add a little bit of lift to those prices.”
He predicts that drivers might be seeing the most expensive summer since 2017, and that come April, we could be paying 10 to 15 cents more per litre more than we’re paying today.
The pandemic continues to be the x-factor. If it continues as it has been, it could continue to sap demand and furnish the market with plenty of supply that no one wants, according to McTeague.
GasBuddy.com reports that the price of a litre of regular unleaded as of 1:30pm today (Wednesday) were:
In Powell River: $137.9
In Campbell River: $138.9
In Courtenay: $138.9
In Nanaimo: $127.9
In Sechelt: $138.9
The average price in B.C. right now is $1.36 per litre.