Volatile gasoline prices head lower after recent spike

Pump-panicked motorists in Canada might be breathing a little easier after this week’s sudden spike in gasoline prices — but experts fear price shocks will continue in coming days as commodity traders speculate about economic stimulus south of the border.

OTTAWA — Pump-panicked motorists in Canada might be breathing a little easier after this week’s sudden spike in gasoline prices — but experts fear price shocks will continue in coming days as commodity traders speculate about economic stimulus south of the border.

The cost of a litre of gas was expected to drop significantly after Wednesday’s jarring increase, according to tomorrowsgaspricestoday.com, a consumer-oriented website that monitors changes in fuel prices.

Pump prices were expected to fall by anywhere from five to seven cents per litre early Friday, depending on the region, said Dan McTeague, a former Liberal MP and longtime gas-price watchdog who operates the website.

Wednesday’s increase was the result of little more than energy-producer price gouging, McTeague declared, noting that producers are likely to back off because there’s nothing to justify the jump.

“The rapid rise without much explanation had more to do with profit-making by Canada’s major oil companies, who constitute a veritable monopoly,” McTeague said.

“(They) were clearly jumping the gun on what news might have been developing in the United States with an anticipated decision by the U.S. Federal Reserve.”

In fact, the Fed did move Thursday, unleashing a series of open-ended actions designed to make it cheaper for consumers and businesses to borrow and spend.

Gasoline markets reacted by moving slightly lower.

But consumers should brace for more price shocks in coming days, thanks to continued speculation about the strength of the U.S. and European economies.

Gasoline prices shot up as much as 13 cents in Montreal on Wednesday to a high of $1.53 per litre, although they dropped back a few cents by Thursday.

There were smaller price increases elsewhere Wednesday, including a spike of 3.4 cents a litre in Toronto, where prices averaged 136.8 cents a litre.

Aside from speculators playing with the market, McTeague warned, the real concern is a serious lack of refining capacity that could create a fuel shortage, especially in eastern Canada.

“I’m not just worried about price increases, which we saw without justification this week,” he said.

“I’m now concerned about the real scenario in eastern Canada and in some parts of the Prairies that we’re going to wind up with shortages and a crisis as far as supply is concerned, both for diesel and gasoline.”

Some analysts say what could mitigate the potential for shortages is an increase in refining capacity, and a national energy strategy.

University of Ottawa professor Jean-Thomas Bernard isn’t so sure. He predicted gasoline prices — while volatile in the short term — shouldn’t go up dramatically in the next few years, barring a significant event such as war in Iran.

The real driver of gasoline prices, he said, is consumption of oil in China and the United States. While growth in the Chinese economy is slowing, increased automotive efficiency and other factors mean consumption is also dropping in the U.S., which should put the brakes on the price of oil, said Bernard.

“Just a few years ago (Americans) were consuming about 20 million barrels a day. Now they are down to slightly more than 18 million,” he explained.

“That’s a huge drop, two million barrels a day.”

Bank of Canada governor Mark Carney made clear his views on the issue last week, suggesting in a speech that consumers and business would benefit if governments and industry build better energy infrastructure.

“New . . . pipelines and refineries could bring more of the benefits of the commodity boom to more of the country,” Carney told a conference of business leaders and international policy-makers in Calgary.

Just Posted

Flooding closes portion of Red Deer’s 43 Street

A portion of 43 Street in Red Deer was closed Saturday morning… Continue reading

WATCH: On 4—20 Day in Red Deer, marijuana users say legal weed a long time coming

Not wanting to wait for the federal government to legalize recreational marijuana,… Continue reading

Former Central Alberta MLA appealing fine for not protecting a list of 20,000 electors

List included names and addresses of voters in Rimbey-Rocky Mountain House-Sundre

Proposed Alberta legislation would protect consumers

Alberta Utilities Commission would be given power to penalize natural gas and electricity providers

Red Deer beginning two major construction projects

Ross Street’s 1935-era water main to be replaced and 67th Street roundabout landscaped

WATCH: Red Deer RCMP and Emergency Services play for Humboldt

Red Deer police officers and firefighters laced up their skates to raise… Continue reading

After air accidents, survivors grapple with flying again

Hundreds of hands grappling with oxygen masks. Flight attendants warning passengers to… Continue reading

Queen Elizabeth to attend pop concert for 92nd birthday

LONDON — Queen Elizabeth is marking her 92nd birthday with a Saturday… Continue reading

‘Such a great person:’ Funeral being held for assistant coach with Broncos

STRASBOURG, Sask. — Mark Cross was a ferocious competitor when he played… Continue reading

UPDATE: Missing Innisfail woman located

A 54-year-old Innisfail woman, who had not been seen since Wednesday, has… Continue reading

Hellebuyck makes 30 saves, Jets beat Wild in Game 5 to advance to Round 2

WINNIPEG — Bryan Little’s teammates were happy they could deliver something special… Continue reading

Red Deer College wins Community Inclusion Award

Red Deer College is an inclusive institution, and it has an award… Continue reading

Firefighters rescue cat from ice floe in river

WINNIPEG — Firefighters are known for helping cats stuck in trees, but… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month