It’s that time of year again, summer vacation season. With it comes some annual rituals, like camping trips and other diversions that lead many into their cars and on long road trips. Those bring with them another well-established tradition: grumbles about higher gas prices.
This year, even with oil prices dropping as dramatically as they have in recent months, is no different.
Retail gas prices have jumped on average 35 per cent since bottoming out at a shade above 90 cents per litre in mid-January. Oil prices haven’t sprung back nearly as fast, notes BMO chief economist Doug Porter, adding “the jump in gasoline has gone way beyond the move in crude.”
“So what’s up?”
There are “typical seasonal pressures” at work here, Porter said in a research note late last week. In each of the past two years, the annual highs for gasoline prices were hit in the fourth week of June, he said. As well, “there are some good old supply and demand factors at play.”
Refinery “issues” are one (output from gas refiners is apparently restricted, seems to be the implied message) while driving in general “is way up this year,” Porter said. More demand means the guys who sell gasoline can charge more, plain and simple.
In fact, the cost of gas is likely enticing more driving this summer. Canadian motorists are paying about $1.23/litre on average, according to Natural Resources Canada.
That compares to $1.40 last June.
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