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Gas prices drop below 80 cents per litre around Alberta following global oil price plummet

File shot of gas pump. THE CANADIAN PRESS/Jonathan Hayward.

Prices at the pump plummeted Wednesday morning around Alberta, a welcome sign for drivers — but also a sign of tough economic times, according to experts.

According to GasBuddy.com, some Costco gas stations around Edmonton and Nisku had prices as low as 77.9 cents per litre on Wednesday morning. In Calgary, the lowest price reported was 79.9 cents per litre.

The average price for Edmonton on Wednesday morning was 85.3 cents per litre, while in Calgary it sat at 87 cents per litre. According to GasBuddy, that’s the lowest average price in both cities since 2016.

Gas prices have been steadily dropping since late February, with a major drop this week as global oil prices fell around 30 per cent on Monday.

Experts say there are several factors in play: an OPEC dispute between Saudi Arabia and Russia, and a direct correlation between oil prices and the global coronavirus outbreak.

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READ MORE: Coronavirus: How is the COVID-19 outbreak affecting gas prices in Canada?

“When you’re seeing a country like China, which is the second in demand for oil, basically locked down, there’s not a lot of gasoline being used in that country,” GasBuddy’s Allison Mac said Monday. “And because of that, there’s really no need for the oil.”

Mac added the dispute between Saudi Arabia and Russia — where both countries have refused to roll back production despite dropping prices — has added to the quick lowering.

READ MORE: Saudi Arabia set to increase oil production to record high amid OPEC dispute

“If you cut down the production, prices will not plummet as dramatically as it’s been,” Mac said.

LISTEN: Why Albertans are seeing a drop in prices at the pump 

While Canada’s Finance Minister Bill Morneau has said he believes the country is in a good position to respond to economic shocks from coronavirus, experts have said the outlook before the virus was already problematic thanks to rail blockades and weather issues.

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There’s also concerns that as oil is devalued, the Canadian dollar could suffer.

READ MORE: Morneau insists economy can handle coronavirus as economist urges fiscal caution

Prime Minister Justin Trudeau announced a $1-billion response fund on Wednesday to help fund research, containment, and job loss costs to the country as the virus continues to spread.

–With files from Global News’ Hannah Jackson, Amanda Connelly and The Canadian Press