Canadians who read the news across the country right now see the term “record” more often in gasoline price stories.
This is a fact that affects every driver across the country – the price of regular gasoline is high, never seen before.
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They have been rising since the end of last year, according to Statistics Canada, and a significant decline may not come for some time, said Patrick De Haan, head of oil analysis at GasBuddy.com.
“We are an all-time high in Canada in many areas,” he told Global News.
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“Unfortunately, we continue to set new records almost every day as we make the transition to summer gasoline in Canada and see oil prices continue to rise as a result of the Russian invasion of Ukraine and the escalation in this situation.
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At that time last year, the average price in Canada for regular fuel was $ 1.31 per liter, according to Statistics Canada. The average price of ordinary gas in Canada on Friday was $ 1.86 per liter, De Haan said.
Statistics Canada data from December 2021 to March this year show the average increase in regular gasoline prices in Canada. Global news schedule
Gas prices have been rising in Canada since December, when the average price of regular fuel was $ 1.40 a liter, according to Canadian statistics. In March, a month after the Russian war in Ukraine, the average price of ordinary gas was $ 1.75 per liter, up from $ 1.56 per liter in February. Average prices for April are not yet available.
Of course, the price of ordinary gas varies across the country. In British Columbia on Friday, the average price of ordinary gas was $ 2.02 per liter, Gasbuddy.com reported. On Wednesday at Metro Vancouver, the price of the pumps was $ 2.11 per liter.
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Newfoundland recorded the highest pump prices on Friday, averaging $ 2.06 per liter, Gasbuddy.com reported. Alberta had the cheapest fuel of $ 1.60 per liter.
Read more: Record fuel prices in New Brunswick disappointment with fuel
The COVID-19 pandemic changed driving habits when the blockade forced residents to stay at home and travel less, De Haan said. Oil producers cut production at the start of the pandemic to meet low demand, but had trouble keeping pace as demand increased, he added.
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This, along with Russia’s war against Ukraine and the West’s economic response to it, has brought gas prices to the skies, De Haan said.
“The challenge is that there is a growing imbalance between supply and demand, and this imbalance has widened even more significantly since Russia’s war in Ukraine,” he said.
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Russia, one of the world’s largest oil producers, launched a military invasion of Ukraine on February 24 that shook the world’s economies.
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Part of this is due to several Western sanctions against the Russian economy, a move the Allies hopes will stifle Moscow’s ability to fund its military efforts.
On February 28, Canada said it would block all Russian oil imports, even though it has not bought them since 2019, the government said.
On March 8, the United States banned all imports of Russian oil, but said it would help free millions of barrels of oil from strategic reserves. The move was intended to help reduce pump prices, they said, but also to help Russian oil-dependent nations move away from their products.
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Many of these nations are in the European Union, which has so far opposed a ban on Russian oil. But as the war shows no signs of slowing down and brutality is reportedly deteriorating, the EU proposed a ban on Russian oil this week with incentives for member states that cannot throw the product away immediately.
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“As long as these sanctions are in place, which could damage Russia’s ability to sell oil, we will have an imbalance in supply and demand on the world market,” De Haan said.
“I really don’t think we will see an improvement for a long time, and I would link it to a resolution between Russia and Ukraine.
Drivers refuel at a Shell gas station in Vancouver on March 8. Daryl Dyke / The Canadian Press Photo File
Because oil is a global commodity, Canada is at the mercy of world events, said Ian Jack, CAA’s vice president of public affairs.
Oil producers are also ready to switch to summer gas mixtures, which cost more to produce than winter mixtures currently on the market, Jack said.
For immediate relief, governments are likely to cut taxes on gas products, but the savings may not be much, given that prices are so high, he added.
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“There’s no way governments can magically get the price back where it was,” Jack told Global News.
“If you think the price of gas is well below a dollar a liter … government spending (on taxes) may be reduced, it may help a little, but you are not, you will not return those prices.”
Read more: Rising gas prices, war in Ukraine pushed inflation to 6.7% in March: Statistics Canada
Tax cuts could also backfire, leading to more demand, De Haan said.
“Indeed, the only improvement will be one of them, either an increase in supply, which seems impossible given the constraints of refineries and the global oil market, or a reduction in demand or a reduction in taxes,” he said.
“Reducing demand is very difficult. … You can’t ask people to stay at home, so the government can’t do much to reduce demand other than allow high prices to start destroying demand. So, as I said, they can temporarily ease taxes, but it can also make the problem worse by increasing demand. “
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