Saskatchewan is faring somewhat better than other provinces when it comes to high gas prices, sitting behind Alberta as the second-cheapest province to fill up in.
However, Patrick De Haan, head of petroleum analysis at GasBuddy, pointed out that prices have gone up close to 20 cents a litre in the last week.
Drivers will continue to see high prices at the pump for the near future depending on the war between Russia and Ukraine.
De Haan said there are a number of reasons for high prices but it’s namely the rising price of oil due to the Russian invasion of Ukraine.
Western countries, including the U.S. and Canada along with the European Union, have placed severe sanctions on Russia.
De Haan said this has “curtailed (Russia’s) ability to supply oil to the global market.”
“Russia, being one of the largest producers to the global market behind the U.S. and Saudi Arabia, is a key source of energy and so sanctioning that energy essentially withholds it from the global market,” De Haan said.
“The resounding imbalance has been enough to throw off the balance between supply and demand and that is what’s pushing prices up significantly, not only in Canada, but the U.S and globally.”
De Haan said while Canada is energy independent, other countries rely on Russia for oil.
“Because oil is a global market, what happens in Canada or the U.S. or in Saudi Arabia can affect everyone globally and that’s because everyone is connected together — whether it’s a hurricane that shuts down U.S. oil production or a terrorist attack in Saudi Arabia, like we saw in 2019.”
De Haan said these events can result in large jumps in the price of oil.
There is some good news, De Haan said. Over the past two days, the price of oil has dropped significantly.
The price of West Texas Intermediate crude oil is about $107 a barrel.
De Haan said the lowering price of oil could help the Canadian average remain under the $2 a litre mark.
De Haan added whether or not we continue to see dropping oil prices is dependent on the situation between Ukraine and Russia.
“If the situation escalates, if the war escalates, we could eventually get to that $2 a litre mark but based on what I know at this moment, I’m hopeful that Canada could avoid that nationwide average of $2 a litre,” De Haan said.
Taxes can also lead to higher gas prices for consumers.
In Saskatchewan, drivers pay 15 cents a litre in provincial tax, 10 cents a litre in federal excise tax and 11 cents a litre for the federal carbon tax starting April 1. Add in GST or HST in other provinces and taxes can end up costing drivers about 40 cents a litre.
Earlier this week, the Alberta government announced it would stop collecting provincial fuel tax as of April 1.
Premier Scott Moe was asked if he would consider making a similar move in Saskatchewan earlier this week and said it was not “under active consideration but there’s nothing that’s been removed from the table.”
Global News reached out to the Ministry of Finance to see if this was under consideration for the budget and received a response that the provincial government will release details when it delivers the 2022 budget on March 23.
As for what drivers can do in the meantime to curb high gas prices, De Haan suggested maintaining their vehicles, driving more efficiently, slowing down on the roads and shopping around for lower prices by using apps like GasBuddy.”
“There are many ways but it’s going to be difficult. I mean things like not letting your car idle during cold weather, all of those can go towards helping you boost your efficiency by 20 to 25 per cent.”
Comments