Buckle up — gasoline prices are about to take a wild ride, predicts a petroleum analyst.
Dan McTeague, president of Canadians for Affordable Energy, said on Wednesday that prices are likely to shoot up by as much as 15 cents a litre within the next day or so.
“142.9 is heading your way and that would be an all-time high,” said McTeague.
Some issues with production at an Edmonton refinery and retailers looking to boost their retail margins to 18 cents a litre are behind the expected spike.
“It’s happening right across the West,” he said, adding drivers from Edmonton to Winnipeg will be shelling out a lot more in coming days.
Even before the latest turn of events, the cost of gasoline and natural gas were on the way up and Red Deer’s record of around $1.35 cents per litre was destined to fall, he said.
A combination of rising energy prices and federal government carbon taxes will make summer road trips and winter heating bills pricier.
“You ain’t seen nothing yet,” said McTeague.
Oil, natural gas and coal prices are all on the rise and on top of that are carbon taxes, which are increasing every year. The federal government’s clean oil standard, which begins in 2023 will also boost the cost of gasoline significantly.
“All of these things are starting to hit hard and it’s going to raise the rate of inflation to be disproportionately high levels that Canadians are going to have difficulty absorbing.
“This is just the tip of the iceberg and the cost of allowing politicians to go hog wild on doubling down on carbon taxes,” he said, adding the government is also discouraging investment in the country’s own energy industry.
Natural gas prices are also on the rise.
U.S. natural gas prices have more than doubled since last year’s pandemic-triggered slump. Prices surged in Canada recently as the heat wave drove demand for more electricity, much of which is produced by natural gas generation.
In Red Deer, a resident received notice this week that their natural gas bill was expected to increase from $138 a month to $184 under the budget payment plan, which seeks to spread the cost of natural gas evenly over 12 nonths to avoid large bill spikes in the winter.
Direct Energy Regulated Services spokesperson Christina Allen said the company’s regulated rates are approved monthly by the Alberta Utilities Commission.
“The monthly rates are determined based on the market price of the commodity plus any over or under-collection for previous months. While our natural gas rate over the last two years was 29 per cent lower than fixed-price competitors, the increase you’re seeing includes the increase in the federal carbon tax effective April 1, 2021, which moved from $1.576/GJ to $2.103/GJ.”
Natural gas users may be facing even higher bills next year even if commodity prices remain unchanged. The federal carbon tax is due to increase to $2.629/GJ on April 1, 2022.
“Federal carbon tax is paid by all customers that consume natural gas, regardless of retailer.”