Surging gas prices are being felt by consumers all across Canada and Saskatchewan is no exception. And, one expert says, it is going to get worse before it gets better.
“It’s surreal. We have never seen a circumstance where prices have risen so dramatically to levels never seen before,” said former MP and current petroleum analyst, Dan McTeague.
In Saskatchewan, gas prices hovered around $1.65 per litre on Tuesday which is among the lowest in the country. However, McTeague, who is now the president of Canadians for Affordable Energy, calls paying the lowest price in this situation a “cold comfort.”
“Oh it’s going to get worse and I would expect that prices will continue to rise. I wouldn’t be surprised to see a scenario unfold here in the province where you move to $1.85 or $1.90 per litre. Perhaps even a scenario where it could be $2 per litre,” McTeague said.
The City of Regina which purchases more than 7 million litres of fuel per year explained that the current price of fuel is 55 per cent over their budgeted price. If the current rate were to be maintained for the rest of the year, the city said, they’d be approximately $4 million over budget.
In a statement, the city said they will be “closely monitoring fuel costs throughout the year and finding opportunities to offset increased costs as required throughout the year.”
McTeague believes the current inflation in energy costs was preventable.
“We’ve spent a considerable amount of time assuming that we could do away with oil and gas and that we could continue to rely on things like windmills and solar panels – all of which are fun, but all of which are inadequate in serving a modern society and its needs for energy.”
In the trucking industry, smaller companies and owner-operators, who are often not paid for a contract until two months after fueling up, are already feeling the effects.
“Are they going to be able to handle those types of costs out of pocket right away? They’re going to really need to have some financial stability behind them to be able to ride through this wave of increased costs in order to be able to continue to operate in the trucking industry,” said Susan Ewart, executive director of the Saskatchewan Trucking Association.
The added costs for the trucking industry which was already dealing with staff and equipment shortages are now being felt by consumers.
“While some say ‘oh its gasoline. Who cares? I don’t drive a car’. Check the price of food. As I said earlier this year – talk of 10 to 15 per cent increases in food I thought was a little optimistic and very conservative. I have put the number closer to 35 to 40 per cent. I’m sticking to that number,” said McTeague.
“Canadians who have spent a decade denigrating our oil and gas sector and ensuring that Canada didn’t have adequacy of supply are now going to have to pay for their rhetoric. We are about to reap a very very bitter harvest.”