Canadians should prepare for a costly summer at the pumps as the price of oil continues to soar, with one analyst warning that a price of $2 a liter could become commonplace in many regions.
The warning comes after months of record price swings due to post-pandemic fuel demand and dwindling supply, and further compounded by sanctions on Russian oil handed down in March.
And while Canadians may have become accustomed to volatile price swings over the past few months, analysts say Easter weekend price increases are setting the stage for an even more unpredictable summer market.
Prices in the Greater Toronto Area (GTA), for example, are expected to soar on Saturday, from an average of $173.9 to $185.9 at most gas stations, representing a peak of 23 cents in just 72 hours.
“Twenty-three cents per liter increase in the past 72 hours…that’s a rate I’ve never seen before, it’s unprecedented and it doesn’t bode well for the summer “said Dan McTeague, president of Canadians for Affordable Energy. CP24 Friday.
McTeague says the jump is due, in part, to the switch from winter gasoline to summer gasoline, an annual event that typically pushes prices up.
Winter gasoline uses butane, which is cheaper to produce and fires engines faster in cold weather. Summer blends, on the other hand, use alkylates, materials more often found in premium gasoline.
This change usually costs consumers five to eight cents more per litre.
“The type of essence you get tends to change from April 15 to September 15. It has been around for 30 years. There’s always a seven or eight cent premium attached to that,” McTeague explained, noting that areas like the GTA will likely see an average of $1.80 to $1.90 at the pump during the summer months. .
“We will see, mark my words, $2 a liter on multiple days throughout the summer this year.”
McTeague says many factors are worsening the price at the pump, including the weak Canadian dollar and declining investment in traditional fuel sources.
But he warns that summer prices could be even higher in the event of other disruptions to global fuel production or distribution, such as a hurricane or pipeline disruptions.
“We are in a new era,” he said. “The Canadian dollar is not reacting to rising oil prices, due to the fact that we are not building pipelines to markets that desperately need Canadian oil and we have taxes on taxes that have been piled up… all of these things contribute to making a bad situation worse.