While some Ontario drivers might be enjoying the recent drop in gas prices, analysts say the cost of fuel could be “all over the map” in the coming weeks.
On Thursday, most major cities across the province saw gas prices fall by another 12 cents, averaging $1.79 per litre for Toronto, GTA, Ottawa, Hamilton, London, Barrie, Kitchener and more.
But according to Dan McTeague, president of Canadians for Affordable Energy, the cost of gas might be moving in a different direction in the next several weeks.
“Supply remains ordinarily tight and if anything, such a dramatic drop in prices may actually encourage people to use more of what we have less of,” McTeague said.
He said that this could result in an “energy supercycle” or a temporary drop by markets.
“Particularly those who have no basis on the supply and demand fundamentals when they make your decisions, may very well be pushing for oil to move right back up to $150 a barrel,” McTeague explained.
He added his concerns about a possible recession.
“I think we’re gonna start to see prices stabilized and then move right back up, especially as we collect evidence that the supply picture is far worse than the concern about demand destruction as a result of these high prices and threats of a recession,” McTeague said.
On Friday, a fall is expected to bring costs down to $1.76 per litre in the GTA and across most Ontario cities, which could be the lowest paid since April 15.
The drop in prices come as the province’s gas tax cut came into effect on July 1.
“It has never been more important to get it done and provide Ontarians with real relief,” said Premier Doug Ford in a media release Friday. “This gas tax cut will provide more relief at the pumps for hardworking families and businesses and put more money back in their pockets, where it belongs.”
The Ontario government cut the gas tax by 5.7 cents per litre until the end of the year.