Ontario motorists are being advised to fill up their tanks now ahead of an anticipated price bump at the pumps on Thursday.
Prices at gas stations in most Ontario cities are expected to rise five cents overnight, according to the website Gas Wizard and industry analyst Dan McTeague, who adds that further increases are likely to follow.
“London’s top price tomorrow morning, as an example, will be 152.9, Toronto 153.9, Ottawa 153.9, Windsor 153.9,” McTeague said.
“There are differences, and those are known as retail margins, but generally this is a wholesale price increase and it looks like it’s the beginning of more to come, although perhaps not as quickly.”
Prices in Cornwall are expected to rise nine cents to 152.6, while in Peterborough, prices are expected to rise 15 cents per litre to 150.6, according to Gas Wizard.
According to McTeague, it appears that the days of gas prices dropping week after week are coming to an end.
In addition to Thursday’s bump, prices could increase an additional two cents on Saturday and another two cents on Sunday, McTeague says, however, he stresses that, right now, it’s still too early to tell.
“It’s clear that the forces that have been effective in driving down oil and gasoline prices are now in retreat, or at least being challenged,” he said, listing several factors that are impacting the price of gas, including inflation and climbing interest rates.
“Oil numbers and fuel is in short supply in many parts of the world … natural gas being cut off or sabotaged in places like Europe, with Canada not being able to get much of its product to market, with shutdowns in China eventually having to come to an end, with the United States finishing its drawdown of its strategic petroleum reserve,” he said.
“It looks like all of the negative crosswinds seem to be manageable, and it’s for that reason that we’re going to likely see prices increase.”
Prices could increase further should the Organization of the Petroleum Exporting Countries (OPEC) announce an oil production drop when ministers meet next week, McTeague said. Reuters, citing sources, reported Tuesday that Russia is likely to propose OPEC cut back oil output by around one million barrels per day.
Gasoline prices mostly reflect trends in global oil prices, and crude — both the U.S. benchmark and the international Brent — has been slumping since mid-June amid growing fears of a global recession that would reduce demand for energy.
The weaker Loonie is also playing a role, McTeague says. Earlier this month, the Canadian dollar was trading above 76 cents U.S. As of Wednesday, it sat below 0.733.
“That means about a four to five per cent increase in the price of every commodity that we consume in Canada, including gasoline and diesel,” he said.
“That’s probably, in the past two weeks, contributed four or five cents a litre to the price that we’re paying today.”
As of Wednesday, the average price of gas in Ontario stood at 147.2 cents per litre, according to GasBuddy.com, down 8.2 cents from last month’s average and well below the peak of 211.5 seen in June, but still up nearly 13 cents from last year’s average of 134.3.
Elsewhere in Canada, fuel prices in British Columbia remain the highest, sitting at an average of 209.0 as of Wednesday afternoon, up nearly 20 cents from last week’s average of 189.2.
— with files from The Associated Press and The Canadian Press
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