Gas prices spike 22 Cents in a single day! What’s going on?
The real story behind the surge in Ontario gas prices
TORONTO, April 19, 2024 An abrupt surge in gas prices is igniting road rage in select regions of Canada. Numerous drivers refueling at gas stations are confronting notably higher prices, with some areas in Ontario witnessing spikes as substantial as 22 cents compared to yesterday.
Gas Buddy
According to GasBuddy’s real-time gas price tracker, the average price per litre across Ontario soared by 10.9 cents to $1.73 by 4 p.m. Eastern Time on Thursday, surpassing the previous day’s average. In Toronto, gas prices experienced a comparable increase. However, in southwestern Ontario locales like Sarnia, GasBuddy reports a staggering 22.3-cent hike, bringing the price to $1.79 per litre as of 4 p.m. Other municipalities in Ontario, particularly those near the U.S. border such as Chatham and Windsor, also witnessed double-digit surges in gas prices.
Premier Ford calls it price gouging
During a question-and-answer session in Oakville, Ontario, Premier Ford expressed his frustration with the surge in gas prices, raising concerns about potential price gouging and drawing comparisons to gas prices south of the border.
He recounted experiences of waiting in lengthy queues for gas, only to wake up the next morning to significantly higher prices, labeling the situation as “unacceptable” and “disgusting.” Ford directed his initial ire towards oil companies, questioning whether gas stations are completely replenishing their tanks overnight with fresh gas or engaging in price gouging.
Pointing to similar climates in regions of the United States where gas prices remained stable, Ford criticized the actions of oil companies, speculating whether they are deliberately waiting for gas station tanks to empty before refilling them with more expensive summer blends.
Highlighting conversations with contacts in the United States, Ford emphasized the significant price disparity between Canadian and American gas prices. He underscored the financial impact on consumers, calculating the equivalent cost per gallon based on Canadian prices.
Mike Eppel, Senior Business Editor at 680 News Radio Toronto, added that refining capacity issues in Canada contribute to the problem, citing the lack of new refineries and challenges in pipeline construction.
Ford also directed criticism towards the federal government’s carbon tax, which he believes has further exacerbated the situation by increasing gas prices. He accused the government of neglecting the burden placed on consumers and accused oil companies of opportunistically raising prices in tandem with the tax.
Despite a projected decrease in gas prices the following day, Ford warned that fluctuations would persist with no immediate relief until June or July.
Gas Prices in Other Provinces
On Thursday, drivers in Quebec experienced a notable increase in gas prices, with a surge of 7.5 cents pushing the province’s average cost beyond $1.80 per litre, according to data from gas sources. By 4 p.m., Montreal’s gas prices had reached an average of $1.88 per litre, marking an 8.9-cent rise from Wednesday.
Expressing concern over the financial impact, Montreal Mayor Valérie Plante remarked on Wednesday before the price hike, emphasizing the potential strain on budgets for ordinary individuals, families, and the general populace.
Meanwhile, in British Columbia, gas prices were steadily approaching the $2 per litre threshold, climbing by 1.4 cents to reach an average of $1.95 per litre by 4 p.m. Eastern Time.
Average Regular Gas Price Comparison by Province
Summer Gas?
Dan McTeague, the president of Canadians for Affordable Energy, explained to the news that Western Canada and certain U.S. markets transitioned from winter to summer gasoline approximately a month ago. He noted that these regions are influenced by prices in the Chicago comprehensive market. In contrast, most of Ontario’s prices are linked to developments in the New York Harbour, which shifted to the summer blend on April 16.
Winter Gas?
Winter gasoline is typically cheaper than summer blends due to its higher butane content, as Patrick de Haan, head of petroleum analysis at GasBuddy, explained to The Canadian Press. Butane is an inexpensive yet volatile component that reduces fuel costs. However, the production of summer gasoline usually adds between five and ten cents per litre. Refineries are mandated by law to switch to blends with lower butane levels for the summer to mitigate environmental concerns such as smog, which can result from faster gasoline evaporation in warmer temperatures.
Roger McKnight, chief petroleum analyst at En-Pro International Inc., elaborated that this transition necessitates refineries to adjust their processes, which incurs significant expenses. These costs are ultimately passed on to consumers, contributing to higher pump prices.
McKnight noted that this year’s price hike exceeds the average increases observed in recent years, with 2022 being an exception due to the Ukraine-Russia war. He stated that the average increase over the past decade has ranged between six and seven cents per litre. The current situation is exacerbated by the fact that U.S. refineries are operating at 88% capacity instead of the usual 95% for this time of year, which further strains supply and contributes to pricing pressures.
How Consumers Can Lower Costs
Consumers facing rising gas prices can employ several strategies to mitigate their impact. Firstly, they can consider carpooling or using public transportation to reduce their overall fuel consumption. Additionally, adopting fuel-efficient driving habits such as maintaining steady speeds and avoiding unnecessary idling can help stretch each liter of gas further. Planning trips efficiently to combine errands and minimize driving distances can also contribute to savings. Furthermore, exploring alternative modes of transportation like cycling or walking for shorter distances can reduce reliance on gas-powered vehicles. Finally, staying informed about gas price trends and seeking out the most affordable options in their area can help consumers make more cost-effective refueling decisions.
Electric Vehicles?
In the long term, purchasing an electric car can be a sustainable solution for consumers grappling with rising gas prices. Electric vehicles (EVs) offer an alternative to traditional gas-powered cars, eliminating the need for gasoline altogether and significantly reducing fuel expenses. While the upfront cost of purchasing an EV may be higher, savings on fuel costs over time can offset this initial investment. Additionally, EVs contribute to lower greenhouse gas emissions, supporting environmental sustainability. As technology advances and charging infrastructure improves, the adoption of electric vehicles is expected to become increasingly viable for consumers seeking to reduce their reliance on gasoline and mitigate the impact of fluctuating gas prices.
Final Thoughts
The current gas situation in Ontario and across Canada is characterized by a complex interplay of factors, including the transition from winter to summer gasoline blends, regional pricing mechanisms, and broader economic and geopolitical dynamics. Rising pump prices reflect the challenges associated with this transition, as refineries incur additional costs that are ultimately passed on to consumers. Beyond seasonal factors, operational constraints faced by U.S. refineries and geopolitical tensions contribute to supply pressures and pricing volatility. To address these challenges, consumers can explore strategies like carpooling and utilizing public transportation, while policymakers may need to consider measures to promote energy resilience and address long-term structural issues within the gas market.
by Myles Shane
Other articles from totimes.ca – otttimes.ca – mtltimes.ca
