KELOWNA – Gas prices are back above a dollar a litre at most Okanagan gas stations following an overnight spike of about six cents per litre. The price tracking website Gasbuddy.com reported prices were around 97.9 cents Tuesday evening and then they jumped to 104.9 by Wednesday morning.
Senior Petroleum Analyst for Gasbuddy, Dan McTeague says prices at the pump are up because of the decrease in value of the Canadian dollar and an increase in global commodity prices. He adds companies also want to make a little more profit and that could account for a bit of the spike. However, he says the bottom line is essentially that prices are set based on speculation, rather than economics.
“Financial speculators are driving this and it has a lot more to do with positions taken based on rumour as opposed to hard facts in terms of the supply and demand matrix for petroleum products,” says McTeague. “If we were looking at good old economics 101, these prices should be remaining where they were two weeks ago, not increasing.”
He says British Columbians are now among the few Canadians paying more than a dollar per litre for gas. However, instead of waiting for any possible price drop, many Okanagan drivers have decided to fill up their tank. McTeague says higher taxes in B.C. are part of the reason gas prices are higher than in other provinces.
While some analysts have predicted prices will continue to increase, McTeague predicts the opposite.
“Gasoline inventories continue to increase to the point where it’s really kind of hard to make an argument that prices somehow are going to go up anytime soon,” says McTeague.
He says prices are expected to drop by two to three cents by this weekend. Gasbuddy reports the national average for a litre of regular gas is up to 96.4 cents a litre as of Wednesday, the same day the price of crude oil dropped almost ten percent.
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