Gas prices in Canada could rise another 10 cents a litre by Thanksgiving weekend and climb a further 10 to 15 cents by the third week of October, despite a G7 plan to release emergency oil, an energy advocate said Monday.
Dan McTeague, president of Canadians for Affordable Energy, made the forecast on CTV’s Your Morning on Oct. 5. Thanksgiving falls on Oct. 12.
McTeague said gasoline normally dips below its summer price at this time of year because of the switch to winter-blend fuel and slowing demand. He said that is not happening this year.
“We have never seen such a loss or such a concern about the lag and inability to meet world demand,” McTeague said.
The forecast is the opinion of one analyst and not a guarantee. The report did not give a current national average price at the pump.
G7 countries announced on Friday, Oct. 2, that they would release 100 million barrels of oil and fuel products from emergency reserves “in the coming weeks.” The group includes Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, with representation from the European Union.
McTeague argued the release will not last long. He said total G7 consumption is about 32 million barrels a day, with the United States accounting for more than half. By his math, 100 million barrels is roughly three days of supply.
“It’s going to help a little bit,” McTeague said. He expects markets to resume pushing diesel prices up and, to a lesser extent, gasoline prices.
Drivers in Ontario have already seen increases. CTV News Ottawa reported on Oct. 1 that gas prices would rise seven cents a litre in Ottawa and across the province on Friday, Oct. 2. That forecast also came from McTeague.
The Bank of Canada has flagged fuel costs as a concern. In its summary of deliberations, published in mid-September, the central bank said it may need to raise interest rates if gasoline prices stay high, because prolonged high fuel costs make it more likely they spread to other goods and services, Bloomberg reported on Sept. 16.
The bank held its policy rate at 2.25 per cent for a seventh straight decision earlier that month. Officials said they had so far seen little evidence that high gasoline prices were passing through to other goods and services, but remained uncertain about the extent of any spillover.
Year-over-year inflation has hovered around three per cent for months, according to the same report. The bank also said the lack of progress in reopening the Strait of Hormuz was keeping oil prices and cost expectations high.
The story is developing. Gas prices vary by city and change quickly, and Canada News Media has not independently verified the pump prices or the forecast.
Drivers planning Thanksgiving travel can check local prices through apps and websites that track retail fuel prices in their area.
Via CTV News and BNN Bloomberg, which reported McTeague’s forecast on Oct. 5, and CTV News Ottawa (Oct. 1). Bank of Canada details via Bloomberg, published by Canadian Mortgage Trends.
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