A vast majority of drivers say they’re worried they won’t be able to afford the cost to fill up at the pumps this summer as record gas prices continue to climb, according to the results of a recent survey.
As the average price for regular gasoline topped the $2-per-litre mark earlier this month, 69 per cent of Canadian respondents to an Ipsos Poll conducted exclusively for Global News said they were concerned they might not be able to afford gas.
Those fears were even more widespread among households with kids (80 per cent) and younger generations aged 18-34 (77 per cent) and 35-54 (74 per cent).
“There’s a great deal of concern about the affordability of gas,” said Gregory Jack, Ipsos Canada’s vice-president of public affairs, in an interview with Global News.
“The worry is especially true across the country and especially with people who have kids.”
Some 75 per cent of Canadians say they’re driving less in order to save on costs at the pump. Half of Canadians surveyed also said that when they do pull into the pumps, they can’t afford to fill their entire tank.
‘Perfect storm’ for pain at the pumps
Most market watchers have pointed to the war in Ukraine and the lingering COVID-19 pandemic as disrupting gas supply and driving up prices for months.
While those pains persist, GasBuddy petroleum analyst Patrick De Haan says the beginning of the summer travel season — the first without pandemic restrictions inhibiting travel for many — is putting renewed demand on the barrels of oil that are making it to market.
“I think we’re seeing more pent-up demand and interest even amidst record prices,” De Haan says.
Jack notes that the high gas prices have come at a particularly difficult time as many Canadian workers return to the office after two years of remote work.
It’s not just higher gas prices that commuters need to worry about, as broad-based inflation hits the essential expenses in the household budget. Even brown-bagging lunches and avoiding eating out at the office can be costlier than before, Jack said.
“Then you have the food costs, the clothing costs, all of the different things that go into having to go into the office … these are all adding up for Canadians,” he said.
“You’ve got a perfect storm for people to really be feeling the pinch of inflation through the price of gas.”
How high will gas prices go?
Ipsos also polled Canadians to ask how high they are bracing for gas prices to go. Three in 10 (29 per cent) said they expect gas to hit the $2.50/L mark, while 15 per cent of those surveyed expect prices at the pumps to hit $3/L.
De Haan said the $2.50-bar is not out of the realm of possibility, but he said it would take “extenuating circumstances” for prices to go that high this summer.
Specifically, he said a disruption to oil production from a major hurricane the likes of Harvey or Ida would be a major risk to gas prices this summer.
“Having said that, I do expect some measure of relief, should we be able to escape hurricane season without a major storm,” he said.
De Haan said the demand for gas typically peaks in mid or late July, starting to recede in August heading into the slower fall season.
Ramped-up oil production in Canada and the United States could also give motorists a “bit of breathing room” at the pumps, but he cautions that the ongoing war in Ukraine and fluctuations in the global economy could continue to put pressure on gas prices.
“We could be in this period of elevated prices for the next year or two, potentially beyond,” De Haan said. “It’s very difficult to know because of the very unique circumstances that we’re in right now.”
Are electric vehicles a realistic option?
Sticker shock at the pumps is pushing more Canadians to consider either downsizing their vehicle or switching to an electric alternative.
Some 44 per cent of respondents told Ipsos they are considering switching to a smaller, more fuel-efficient vehicle in the next year.
More than a third of respondents (36 per cent) said they’re considering purchasing an electric vehicle (EV) in the next year to lower their gas bills, with almost half (49 per cent) of 18-to-34-year-old respondents saying they’re thinking of going electric.
Those earning above $100,000 annually are more likely to be thinking about buying an EV (45 per cent) compared to those earning between $40,000 and $60,000 (31 per cent).
The higher upfront cost of EVs is certainly a barrier to making the switch, but Dimitry Anastakis, professor at the Rotman School of Management, says the more consumers see elecrtic models on the road, the more they’re seeing it as a viable option.
“We’ve been dealing with internal combustion engine cars for more than a century, and now the option is really here for ordinary people to buy an (electric) vehicle; it’s still a little bit more expensive than a lot of the gasoline powered cars, but it’s a realistic option,” he told Global News in an interview last week.
“It is a lot cheaper to fuel your EV than it is right now to fuel a gasoline-powered engine.”
But price is just one factor that goes into whether an EV is in a household’s near future.
Shortages of rare minerals and semiconductors used in manufacturing an electric vehicle are a constraining factor on the widespread rollout of such cars, Anastakis notes. Government incentives for the purchase of such vehicles also vary from province to province, adjusting the cost-benefit analysis for some Canadian consumers.
Finally, there’s the issue of reliable charging infrastructure. While Anastakis notes that today’s refuelling infrastructure remains gasoline-focused, in a few years time, he sees the calculus shifting to put EVs on equal ground.
“In the next ten years, pretty much anybody who’s going to be buying a vehicle is going to face this fundamental question: Do I get an internal combustion engine based on gasoline or do I get an EV?”
— with files from Global News’ Aaron D’Andrea and Anne Gaviola
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