Gas prices are hitting records in Canada and it’s not going to stop anytime soon: expert

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How high will gas prices go?
Canadians vent their frustrations as prices at the pump soar past $1.60/L in BC – Apr 30, 2018

Canadians are looking at a very expensive 2018 when it comes to gas.

In B.C. the price of gas hit $1.619 on Monday – the highest price point ever for North America, Gas Buddy spokesperson Dan McTeague said.

In Manitoba, gas was at an average of $1.276, which is up nearly 31.5 cents from last year’s average at the same time.

READ MORE: Vancouver reaches highest gas prices in North American history, expected to keep rising: analyst

And McTeague said Quebecers could expect to see a big jump Tuesday morning, as much as 12 cents which would bring the price of gas to around $1.47.

Gas prices haven’t been this high since 2014.

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“We’ll see prices pushing back to their highest levels,” McTeague explained. “This will be the most expensive year bar none going back to at least 2014.”

There’s a few reasons for this inflation, McTeague explained, including a weak Canadian dollar, taxes, refinery supply and demand and the changing retail landscape.

WATCH: What’s causing the spike in gas prices?

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What’s causing the spike in gas prices?

First, while oil prices have increased, in the past this has signaled an uptick of the value of the Canadian dollar. However, the same hasn’t happened this time, McTeague explained.

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Oil prices have gone up nearly one third, year over year, but since the Canadian dollar is so low, that means instead of getting the full value of US$68 a barrel, Canadians get around $48.

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“If the Canadian dollar were on par with the U.S. dollar you would be saving 15 cents a liter at the pumps across Canada,” McTeague said.

Another major factor in gas pricing is the lack of what McTeague calls gas bar shenanigans: where local gas stations compete and drop prices to outbid competitors.

“I go to Esso here in Toronto they’re all owned to a large extent by [Couch-Tard] which of course is now called Circle K,” McTeague explained. “Shell did the same thing a couple of years ago.

“So the business is changing and with it is less willingness to use gasoline as a loss leader”

Click to play video: 'Long lineups as people wait for deal of a lifetime in Bragg Creek'
Long lineups as people wait for deal of a lifetime in Bragg Creek

Prime Minister Justin Trudeau also used B.C.’s high gas prices to attempt to sell the Trans Mountain pipeline during a speech on Monday.

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“I know that part of the challenge that folks across the Lower Mainland and B.C. are facing right now is related to the fact that we are connected so closely to the U.S. market and to what happens in the United States,” Trudeau said.

Canada currently ships oil only to the United States and loses about $15 billion annually by not exporting it to other markets through an expanded pipeline, he said.

“That level of dependency at any time would be difficult but right now at a time of protectionism and unpredictability in the United States it makes sense to diversify our markets to new markets across Asia,” Trudeau said.

*with files from the Canadian Press

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