Canadians planning a road trip this summer could see some relief at the pumps but a volatile energy market and weather disruptions threaten gas prices in the country, experts say.
Nationally, the average price for regular unleaded gas stood at $1.60 per litre on Wednesday, according to fuel price tracking websites GasBuddy.com and GasWizard.ca.
Monthly average prices in the country have been on a downward trend since April, but remain relatively high, said Patrick De Haan, head of petroleum analysis at GasBuddy. That could deter some Canadians from doing long road trips this summer, he said.
Gas prices typically tend to ease in the summer months as refinery maintenance ends, along with the switch over to summer gasoline, De Haan said. The additional gasoline supply is what usually starts pushing gas prices down every year, which is what we’re experiencing right now, he said.
“As we get into the summer, I do think that gas prices nationally could drop another five to 10 cents a litre over the next several weeks as we approach Canada Day,” De Haan told Global News in an interview Wednesday.
If all goes well, De Haan expects that the Canadian average could fall below $1.50 per litre by July 1.
However, the “wild card” could come in July and August when hurricane disruptions threaten major refineries in the United States, which in turn could have a potential impact on costs, he said.
Compared with last year, energy prices are pretty much on par with where they stood in 2023 despite the increase in the carbon price that went into effect on April 1, said Dan McTeague, president of Canadians for Affordable Energy and a former Liberal MP.
McTeague is less optimistic about Canadians seeing a continued downward trend in gas prices this summer.
“I think we should expect the unexpected,” he told Global News, adding that “gas prices have already dropped rather dramatically.”
Lower prices could in fact spike demand, causing prices to “spring right back very quickly,” McTeague said.
Volatility in the energy market, the situation in the Middle East and the Ukraine war are also factors that could put upward pressure on gasoline prices, he said.
Meanwhile, the price of diesel, which is in great supply at this time of the year, is also declining.
“We’re seeing some of the lowest diesel prices since July of last year,” De Haan said.
“In fact, in the next few weeks, there’s potential that we could see diesel falling to its lowest level since Russia’s invasion of Ukraine.”
Inflation impacting travel plans
Cost of living concerns are weighing on many Canadians’ plans to get away this summer.
Recent Ipsos polling conducted exclusively for Global News showed that a majority (67 per cent) are scaling back their vacation plans for the summer due to inflation, up five points from last year.
Some 64 per cent of respondents also said that economic uncertainty is affecting their vacation plans, and three in five said they’re prioritizing other savings instead of time away.
The relief at the pumps comes as another mode of travel has become increasingly expensive.
The International Air Transport Association warned on Monday that airfares are likely to continue rising as the industry faces high jet fuel costs, a pandemic hangover and a global push to decarbonize.
Despite that, De Haan said he expects more Canadians and Americans will opt to fly than hit the roads for vacations this summer.
“Road trips have gotten more expensive — not just because the average price of gasoline remains relatively high, but the cost of going places, hotel stays, restaurants have seen increased costs as well that are costing Canadians much more,” he said.
The latest inflation data from Statistics Canada showed that Canadians paid 7.9 per cent more month to month at the pumps in April. Higher global oil prices, gas stations switching to more expensive summer blends and a hike in the federal carbon levy contributed to the gain, StatCan said.
— with files from Global News’ Craig Lord and The Associated Press.
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