Canadians woke up to spiking gasoline costs this morning, with prices reaching 140.1 cents a litre in Toronto and 147.9 in Montreal.
That’s about eight per cent higher than a year ago, even though crude oil prices are lower.
Crude for May delivery fell $1.05 to $102.95 US a barrel Wednesday morning on the New York Mercantile Exchange. A year ago, crude was trading at $104 a barrel.
Gas price watcher Dan McTeague says the oil industry usually tries to explain the increase by saying it’s to cover the cost of converting from winter to summer fuel.
But McTeague, a former Liberal member of Parliament and a harsh critic of the oil industry who runs the website Tomorrow’s Gas Price Today, calls that a “lame and well-worn excuse.”
He says fuel specifications in Canada — unlike the U.S. — don’t change with the seasons.
David Detomasi, an assistant professor of international business at Queen’s University in Kingston, Ont., calls the latest increases “pretty shocking.” For the most part, he says, there’s no reasonable explanation.
While prices across the country vary widely due to various provincial and territorial tax regimes, prices in southern Ontario could hit record highs between 143 and 147 cents a litre by the end of this month, analyst Roger McKnight of Oshawa-based En-Pro International Inc. said Tuesday.
“It’s going to hit and stick,” McKnight said. “Prices increased nine of the last 10 years in March and April, but this year they started in January and they are continuing to roll.”
Crude shortage not the problem
Gas prices usually rise in the spring as refineries shut down to convert from producing diesel to gasoline as the summer driving and vacation months approach. This year, however, shutdowns of four refineries in Pennsylvania and five in Europe have severely cut North American supplies, McKnight said.
McTeague’s website includes these other price increase forecasts per litre in Canada compared to a year earlier:
