Since the beginning of 2022, the price of gas in northwestern Ontario increased by roughly 40 cents per litre, and according to GasBuddy, we could be breaking that $2 mark sooner than later.
GasBuddy Petroleum Analyst, Patrick De Haan says due to a few factors the price of fuel will continue to increase in the coming weeks.
“Oil prices last week jumped by $10/barrel from the start of the week to the end of the week,” says De Haan. “That combined with the switch over to clearer more expensive summer gasoline that’s taken effect.”
Fuel prices were expected to rise by about 11 cents this month, as fuel manufacturers switch from winter gasoline to a summer gasoline blend. Summer gasoline blends are typically used between April and September in Canada.
“Also, the fact that inventories of gasoline including diesel fuel have continued to plummet in recent weeks and that’s causing prices to skyrocket,” adds De Haan.
On Sunday (May 8, 2022), Kenora saw the second price jump in the past week as prices soared from 189.9 cents per litre to 195.9. This comes after the previous spike of 7 cents on Tuesday (May 3, 2022), from 182.9 to 189.9 cents per litre. The price of gas in Dryden has stayed at 189.9 cents per litre, while Sioux Lookout is reporting a high of 210.0.
As of Tuesday (May 9, 2022), the average price of gas in Kenora is 189.9, which is the highest average ever seen, dating back to 2008. To make matters worse, the average price of gas in Canada jumped 10 cents up to 190.0, which is the most expensive average seen since 2014, when the average in Canada was 143.0.
The most expensive city to purchase fuel right now is Vancouver, BC at 218.1 cents per litre. The cheapest fuel price in Canada can be found in Leduc, AB at the low price of 149.9.
De Haan notes looking forward, it’s not looking good in terms of any sort of drastic decrease in the price of fuel.
“Oil prices are down $7/barrel today (May 9, 2022), the market has been extremely volatile in the last month or two ever since Russia’s invasion of Ukraine. Today it’s down, but tomorrow it could be up, but if today’s decrease of $7/barrel sticks….. well we may see some relief in time. I don’t see a long-term downward trend emerging.”
The current conflict regarding Russia’s invasion of Ukraine has affected the price of fuel tremendously. De Haan says that’s largely due to the European Union (EU) publicizing its intent to introduce sanctions on Russian oil.
“That certainly would be a significant impact because Russia supplies 4.5 million barrels to members of the EU every day, and there is really no place the EU will be able to turn to make up that loss, should they sanction Russia.”
Some of the recent increases seen are due to the EU not hiding the fact their intent to sanction Russian oil.
Aside from the worry of gasoline prices skyrocketing to over $2 per litre, the price of diesel has increased at a much more drastic pace in the last week.
“The average price of diesel fuel in the province [of Ontario] stands over $2/litre and it continues to rise. In fact, at this moment the average in the province [of Ontario] now stands at $2.36 per litre in diesel fuel. While we may see some improvement, extremely tight inventories of diesel fuel may persist for quite some time.”
The Ontario government has introduced legislation that, if passed, would cut the provincial gas tax by 5.7 cents per litre and the fuel tax by 5.3 cents per litre for six months, starting July 1, 2022.