After hitting decade-long low gas prices just over 12 months ago, Albertans are being squeezed at the pumps as summer arrives.
The average price in Red Deer sits at about $1.29 per litre and if current trends continue, that could easily surpass record highs near $1.35 per litre that were hit in 2018.
“Without a doubt, very expensive. Provincially, Alberta is at 1.30 per litre within about five cents of reaching all-time record highs in Alberta. Kind of a dubious distinction,” said Patrick De Haan, head of Petroleum Analysis for GasBuddy.com.
“A lot of it has to do with the rise of carbon tax across most of Canada. Beyond that, the reason for the strong increase versus even the start of the year and a year ago has to do with some imbalances created by COVID.”
Alberta has flirted with prices slightly over 1.31 per litre at times, but just once in the past 10 years has the monthly average been above $1.31 per litre, when it was $1.32 in July of 2008.
That’s a stark contrast to last summer when fuel prices in Alberta hit a decade-long record low, where prices were anywhere between 67 to 76 cents per litre.
“Early on in the pandemic, Canadians parked their cars for several weeks as we kinda tried to get out from underneath this pandemic. As a result of that, demand for crude oil and gasoline plummeted. Which induced oil producers to greatly curtail operations and to start laying off workers and shutting down wells,” De Haan said.
“Now that we’re on the flip side and things are improving, we are left with that imbalance – global demand is close to or likely to exceed global supply.”
Today’s prices at the pump largely reflect that according to De Haan, who said Albertans shouldn’t expect any relief over the summer months and likely not until 2022 when supply catches up with demand.
“The prognosis isn’t terrific. A lot of that has to do with the fact that demand does continue to recover. I would not expect much relief in prices until potentially later this winter and for now, there’s not going to be much downside,” he said.
“We are slowly going up and that could continue through July or August when we see peak demand. It’s not impossible that we could see all-time record highs or close to a $1.40 per litre before things start to recede.”