Gas prices in Ontario and Quebec will jump to their highest level in almost two years on Thursday.
According to Dan McTeague, president of Canadians for Affordable Energy, the average price for a litre of gas in both provinces is set to rise 14 cents overnight.
“The jump is the result of a switch over from winter to summer gasoline,” McTeague told Global News.
“We do that every year.”
When Ontario drivers hit the pumps on Thursday, McTeague said the price of gas is expected to be 179.9 cents a litre.
Meanwhile, in Quebec, those in Montreal and Quebec City will see 188.9 cents a litre at the pumps.
This is the highest price for gas seen in both provinces since Aug. 2, 2022, he said. Gasoline switches to the cheaper winter blend in the fall.
However, McTeague said the increase is significantly more this year due to energy prices in the U.S markets.
Financial news and insights
delivered to your email every Saturday.
“What we saw (Tuesday) was an increase from $US2.50 a gallon, that’s on the markets in New York, to US$2.83 a gallon,” he said.
Heading into the summer months, McTeague said he predicts gas prices to fluctuate from the low end of $1.75 a litre to the higher end of around $1.95 a litre.
Thursday’s price hike echoes a report from GasBuddy, a U.S.-based price-monitoring company that crowdsources gas prices across Canada.
That report indicates there is “virtually zero chance that gas prices will ever fall below $1 per litre again.”
Patrick De Haan, petroleum industry analyst at the company, pointed mostly at the federal carbon price, which rose to $80 a tonne earlier this month, up from $65 a tonne. That translated to a rise in gasoline prices of about 3.3 cents per litre on average April 1. Canadians, however, do receive a rebate from the carbon pricing increase.
However, De Haan also noted geopolitical strife like Russia’s war on Ukraine, more expensive summer gas, increased demand amid summer travel, and maintenance at refineries also push prices up.
“It’s becoming more obvious that with every yearly increase, it’s becoming less and less likely that we would see a sub-dollar-a-litre price,” De Haan told Global News earlier this month.
Toronto Metropolitan University global management professor Michael Manjuris agreed with GasBuddy’s prediction, also saying producers will reduce or increase how much petroleum they put into the market to match demand, maximizing their profit.
Higher gas prices drove a rise in Canada’s annual inflation rate last month, Statistics Canada data showed on Tuesday.
The federal data agency reported that the overall inflation rate in the country was 2.9 per cent year-over-year in March, up from 2.8 per cent the previous month.
The annual pace of inflation has been hovering just below three per cent so far this year. It cooled to 2.8 per cent in February compared with 2.9 per cent in January, the agency had reported last month.
At the gas pumps, Canadians saw a 4.5 per cent year-over year price jump in March, compared with a 0.8 per cent increase in February.
This was due to higher global crude oil prices arising from supply concerns amid “geopolitical conflict and continued voluntary production cuts,” StatCan said.
Compared with February, gas prices rose by nearly five per cent month-over-month.
— with files from Nathanial Dove and Saba Aziz
© 2024 Global News, a division of Corus Entertainment Inc.
