Gas prices surge seven cents

Gas prices surge seven cents

Gas at 99.9 on Friday, about the range we can expect for summer, says industry analyst

Gas prices jumped seven cents a litre in Red Deer on Friday.

In Calgary, the price rose 10 cents a litre, from 89.9, as retailers make up for losses racked up in recent months, when gasoline was being sold below cost.

“Whether you’re in Red Deer or Calgary, the cost of buying fuel, to replace it today, is 93 cents a litre. So you can’t be selling for 92 or 89 (cents),” said Canadians for Affordable Energy president Dan McTeague.

“That’s essentially why the prices have gone up.

“All this is due to one major factor — recovery, recovery, recovery. Demand is starting to go up, probably four or five per cent a week here in Canada. And that number isn’t likely to slow down,” said McTeague on Friday.

“That’s really what’s driving this more than anything else, it the price of fuel reflecting a new reality for demand.

“At this time of year, demand is typically significantly higher as people take to the roads for vacations and holidays, and more importantly, as things get back to normal.”

Oil prices have been on the rise, and are likely exerting “slight upward pressure” on pricing, but they are not a huge factor in what drivers are experiencing at the pumps.

“We’re not putting oil in our tank. We’re putting gasoline in our tanks. It’s a different market,” he said, adding the price responds to direct demand and what is happening in markets in Western Canada and the U.S. Midwest.

Some may wistfully recall those days in April, when gas prices bottomed out at around 63.9 cents a litre, but that was never going to last for long, said McTeague.

On the positive side, gas prices are still better than they were a year ago, when gas was selling for $1.10 per litre.

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Gas prices