Drivers across Canada are seeing some relief at the pumps after gas prices dropped sharply in several provinces, but experts say the savings could disappear within days as uncertainty continues to rattle global oil markets.
Ontario and Quebec saw overnight price drops of about 10 cents per litre, while prices also declined in parts of Western Canada, including Alberta.
“We should be expected to see even lower gas prices at least in Calgary, Edmonton,” said Dan McTeague, president of Canadians for Affordable Energy, on Thursday. “That’s because the wholesale price for gasoline has dropped about 10 to 12 cents a litre. That means that we could be pricing in $1.55 to $1.60 over the next 24 to 48 hours.”
McTeague said the recent decline follows a sharp drop in crude oil prices over the past 10 days.
“It’s at about US$75 or US$76 a barrel right now. As of a week and a half ago, it was US$90 a barrel,” he said.
Oil prices had surged after conflict in the Middle East disrupted shipping through the Strait of Hormuz, a key route for global oil exports. More recently, hopes the waterway could reopen have helped ease oil prices, bringing gasoline prices down with them.
But McTeague cautioned the situation remains highly volatile.
“Almost all of this is due to the ongoing back-and-forth over what may be emerging from the Strait of Hormuz,” he said. “As news develops that there could be a breakthrough, commodity and futures markets respond positively.
“But this morning they’re not so optimistic. Oil’s going up two or three dollars a barrel today. That means gasoline, in the next 48 hours, will likely follow here in Canada by about three to four cents a litre.”
Richard Masson, former chief executive officer of the Alberta Petroleum Marketing Commission, said the longer-term outlook for fuel prices remains uncertain because global supplies of refined fuels are still tight.
“The problem is we don’t have enough refined products — gasoline, diesel and jet — globally, and we’re not getting enough out of the Persian Gulf,” he said.
While North America has been able to boost refinery output, Masson said shortages elsewhere continue to put upward pressure on prices.
“We don’t have a clear way on how it’s going to resume normal operations once the war ends,” he said. “It’s probable that we’re going to end up in a situation where prices have to go higher to allocate the resources that are available.”
For now, many drivers are taking advantage of the lower prices while they last.
German tourist Andreas Zink, who was filling up his RV in Calgary after spotting gas selling for 157.9 cents per litre, said it was the cheapest fuel he had seen during his three-week trip across Canada and that he was happy to save some money.
“Maybe about $30 or $50,” he said. “It was worth it with this big car.”
Jayden Beaulieu, who was filling up a work truck, welcomed the temporary relief.
“It’s great but I don’t expect it’s going to be long-lived,” he said.
