As the price of gas jumped again in the capital region Tuesday, industry analysts warned drivers to get used to the higher cost of getting behind the wheel.
The average cost of regular fuel in Greater Victoria rose to $1.91 per litre Tuesday, up from an average of $1.874 Monday, according to Gasbuddy.com.
Gaswizard.ca noted the highest price for a regular litre of fuel in Greater Victoria was $1.949 Monday, while the cheapest litre of gas in the region that day was $1.80.9 at Costco. By Tuesday, many stations were selling gas for $1.969 a litre.
“I think largely the decline in gas prices has now matched the drop in oil prices,” said Patrick De Haan, head of petroleum analysis for GasBuddy, which tracks energy prices around North America.
De Haan said the Organization of the Petroleum Exporting Countries is now discussing the possibility of cutting oil production, which resulted in oil prices jumping by about three per cent Tuesday, and could translate into more gas-price increases down the road.
“So the declines may be wrapping up for the time being, absent some other development,” he said. “We may not see gas prices go a whole lot lower for now.”
Gas prices had been on a steady decline since June due to easing demand and increased supplies of crude oil.
On June 9, the price of gas in Victoria hit $2.339, the highest-ever recorded average for the area. The lowest average price recorded this year was $1.517 on Jan. 3.
De Haan said many people want to know when gas prices will return to normal, but while some of the inflationary pressures have been reduced, the war in Ukraine remains an “active factor.” “And there’s just no escaping it until there’s some sort of resolution there.”
Other variables could force prices even higher. “It’s not impossible that if we get a hurricane or something that disrupts the flow of oil from the U.S., it could impact prices in Canada, and we’re coming into that time of year when hurricane season flares up,” he said.
If the U.S. Federal Reserve and Canadian Central Bank raise interest rates, it could blunt any increase in the price of oil, he said. “And I think that’s why OPEC is talking about potentially cutting oil production, because it sees the threat of recession and it wants to be out well ahead of any drop in consumption.”
De Haan said gas prices can be a sign of the strength of the economy. “When gas prices are low, it’s a sign of distress, and when prices are high, it’s a sign of economic strength, because people are going out and doing things and spending money and driving around.”
