A person fuels up a vehicle at a Shell gas station, in Burnaby, B.C., on Wednesday, March 2, 2022. Atlantic Canada could face the worst of the fallout of rising fuel costs as prices surge due to supply shortages and the ongoing war in Ukraine, according to one expert.THE CANADIAN PRESS/Darryl Dyck

High gas prices hitting Atlantic Canada hard due to region’s reliance on heating oil

High gas prices hitting Atlantic Canada hard due to region’s reliance on heating oil

HALIFAX — People across Canada are feeling the financial pressure of surging gasoline prices, but residents of the Atlantic region are being particularly hard hit, in part, because of their heavy reliance on oil to heat their homes.

The four provinces with the highest percentages of fuel oil for residential heating in 2019 were all in Atlantic Canada, according to data from Nova Scotia’s Finance and Treasury Board.

Fuel oil composed roughly four per cent of residential heating energy in 2019 across Canada, but that number jumped to almost 50 per cent in Prince Edward Island. About 36 per cent of residential heating energy in Nova Scotia was from fuel oil in 2019, while it was 22 per cent in Newfoundland and Labrador and seven per cent in New Brunswick.

University of New Brunswick economics Prof. Constantine Passaris said he’s concerned Atlantic Canadian energy consumers will have a difficult time adjusting to the high prices, which have risen sharply since the start of Russia’s invasion of Ukraine two weeks ago.

“The whole economy of the Atlantic region is going to feel the bite of this because gasoline has become such an essential element and input into almost everything that we do and everything that we buy,” he said in an interview Tuesday.

Those who will be hit hardest include people on fixed incomes and small business owners, he said, adding it may be some time before the region gets a reprieve from the “imported inflation” on fuel oil and gasoline. International market pressures outside of Canada’s control, he said, mean consumers in the country are “at the mercy of those prices.”

Gas prices have been rising for weeks due to the conflict in Ukraine and in anticipation of potential sanctions on the Russian energy sector. On Tuesday, U.S. President Joe Biden ordered a ban on Russian oil imports in retaliation for President Vladimir Putin’s onslaught in Ukraine. Biden acknowledged that his decision would lead to even more expensive gasoline.

“Defending freedom is going to cost,” he said.

Dave Hanhams, owner of Hanhams Gas & Convenience in Guysborough, N.S., said high gas prices have led to lineups outside his business over the past few weeks, but he said he thinks the worst is yet to come.

“People won’t be able to go anywhere, or they won’t be able to afford to go anywhere,” Hanhams said in an interview Tuesday, adding that he hasn’t seen such an extreme spike in prices in his 25 years as owner of the gas station.

In the Halifax area and across Prince Edward Island, prices for regular unleaded self-serve gas reached $1.88 per litre on Wednesday. In New Brunswick, prices hit $1.82 a litre and were at $1.91 a litre on Newfoundland’s Avalon Peninsula.

Those prices are worrying Nova Scotia Premier Tim Houston, who said on Tuesday he hadn’t decided yet what the government would do to help consumers. When asked whether he would consider temporarily cutting the provincial taxes on gasoline, he said his government was “looking at every option that’s on the table.”

This report by The Canadian Press was first published March 9, 2022.

— With files from The Associated Press.

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This story was produced with the financial assistance of the Facebook and Canadian Press News Fellowship.

Danielle Edwards, The Canadian Press

energy sector