Gas prices: Why drivers in Eastern Canada could pay more – CTV News

Drivers in Eastern Canada could see big increases in gas prices because of various factors, especially the higher cost of the summer blend, industry analysts say.

Patrick De Haan, head of petroleum analysis at fuel savings website GasBuddy in Chicago, predicts a big gas hike for the eastern portions of Canada including Ontario, Quebec, Newfoundland and Labrador, New Brunswick and Nova Scotia over the next several days, while some areas in the Maritimes have already seen the increases.

“Unfortunately, for … really a third of Canada, we’re likely to see a big jump in what (motorists) are seeing at the pump,” he said in a video interview with CTVNews.ca. “Gas prices could rise in excess of 10 cents a litre. All of that having to do with yesterday’s switchover to summer gasoline.”

Gas prices may continue to increase for the next week or two, De Haan said. “But I think the end is near for the seasonal increases and we should start to see prices decreasing potentially by May (long weekend).”

Dan McTeague, president of Canadians for Affordable Energy, also forecasts gas price hikes.

Ontario and Quebec will see a 14-cent-per-litre increase overnight Thursday, he said on Wednesday. He predicts the price per litre will rise to $1.79 in cities across Ontario, the highest since Aug. 2, 2022. In Quebec, he expects the price per litre will increase to $1.88.

McTeague attributes this week’s increase to the higher cost of summer blended gasoline.

De Haan, meanwhile, observed the following changes in prices across Canada compared to a week ago:

• Prices in Saskatchewan are flat;
• Manitoba prices are up about a half a penny per litre;
• Alberta is down seven-tenths of a penny per litre;
• P.E.I. is up about 1.2 cents a litre;
• B.C. is up about 2.5 cents a litre;
• Nova Scotia is up three cents a litre;
• Quebec is up 3.5 cents a litre;
• Ontario is up 4.5 cents a litre;
• New Brunswick is up five cents a litre;
• Newfoundland is up seven cents a litre.

Factors behind spikes

“Some gas stations have already raised their price, in essence, but some others may not for the next day or two,” De Haan said. “So over the next several days, the averages will continue to rise as more stations raise their price. … Most of the increase is happening right now in the eastern portions of Canada.”

The summer gas switch will have “just a one-time impact” on gas prices, De Haan said.

More drivers are on the road, creating rising demand for gas as temperatures warm up, and refiners are wrapping up maintenance ahead of the start of the summer driving season. “While they do that maintenance, they’re generally not able to supply as much gasoline into the market,” De Haan explained.

Despite tensions between Iran and Israel, the recent attack has had “little impact” on the price of oil, De Haan said.

“Last week, oil prices did climb to their highest level (in) six months as Iran suggested it was going to attack Israel,” he said. “Now that those attacks have happened and they largely have been unsuccessful, the price of oil is actually declining.”

Third major spike in 2024

Michael Manjuris, professor and chair of global management studies at Toronto Metropolitan University, said the new gas price increase would be the third major spike across Canada since the start of the year.

One factor is the price of crude oil worldwide has risen 15 per cent since Jan. 1, Manjuris said.

The federal carbon tax increase of about 3.3 cents per litre on April 1 is also another reason for the big jolts in gas prices, he added.

Although the switch to summer blend fuels typically happens every year, Manjuris said, it will be more painful economically because it’s on top of the two other major increases this year. “This increase now will cause the overall price of gasoline to be very high,” he said in a video interview with CTVNews.ca. “We haven’t seen these kinds of prices since 2022.”

Manjuris believes gas prices will continue to rise through the summer as global demand for oil begins to grow. “That’s because we’re seeing increased economic activity in China, in the United States and in Europe,” he explained. “When those things all come together, price of crude oil starts to go up. … So I’m predicting that because of demand increasing, price of gasoline in Canada will also go up in the summer months. I’m going to suggest three to five cents a litre will be the peak before it starts to come back down.”

Regional differences

The West Coast and Prairies won’t have any gas price hikes coming soon because they already transitioned to summer gasoline, De Haan said. “So this is something associated with the switchover, which happens last in the eastern parts of Canada,” he explained.

In addition, he said regions have “subtle differences” in their supplies of gasoline.

“Supplies of winter gasoline in the eastern portions of Canada was rather lavish and so discounts were significant,” he said. “But now that the eastern part of Canada is rolling over to relatively tight supplies of summer gasoline, this is something much more impactful. That is other areas of Canada did roll over to summer gasoline, but they did not have necessarily the big discounts that would associate with the big price swing that we’re seeing.”

With files from CP24.com Journalist Codi Wilson

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