January 2, 2017 12:11 pm
Updated: January 2, 2017 10:10 pm

Ontario gas prices increase due to province’s cap-and-trade program

WATCH ABOVE: The price of gas soared to new heights as Ontario's carbon tax kicks into gear. Dan McTeague explains where prices are heading and how it will affect residents.

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A Toronto-based gasoline expert has a warning for Ontario drivers after the province’s cap-and-trade program started on Sunday.

“The days of a dollar a litre (gas) are definitely over. We’re now looking at between a $1.10 and $1.25 for 2017,” GasBuddy’s senior petroleum analyst Dan McTeague told Global News Monday.

READ MORE: Cost of cap-and-trade for Ontario consumers beginning Jan. 1, 2017

The Ontario government implemented the cap-and-trade program as a way to address climate change. The program puts limits on the emissions industries and businesses can produce.

If a business comes below its yearly limit, it can sell the difference to other businesses. However, if the business exceeds its limit, it must buy credits – costs which will be passed on to consumers.

WATCH: Why Canadian gas prices are on the rise. Mike Drolet explains 

“It’s the emitters that are now paying, and of course they are passing that on to gas stations who in turn are passing it on for gasoline – 4.4 cents a litre with HST and 6.1 cents a litre for diesel,” McTeague said, adding natural gas, propane and furnance oil customers will also see their bills increase “dramatically.”

He said with higher diesel gas costs, it will impact the prices of goods and services such as groceries and transportation.

McTeague estimated the price of gas could be around $1.20 a litre by the end of January.

He said the average family could pay an extra $350 annually now.

WATCH: Sticker shock jolts Ontario drivers at the gas pumps. Cindy Pom reports. (Jan. 2)

© 2017 Global News, a division of Corus Entertainment Inc.

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