Gas price analysts say prices at the pump are still at the whim of the Delta variant of COVID-19, and could rise and fall depending on how the virus spreads.
Dan McTeague, president of Canadians for Affordable Energy, says the variant has caused concern around demand as it slows down the economic reopening, which has at times brought down the price of crude oil.
The price of crude oil was at US$68.63 per barrel as of Tuesday afternoon after prices as high as US$75 per barrel in July, but the amount Canadians pay at the pump has consistently risen in recent weeks.
McTeague says that's because the value of the Canadian dollar also dropped when the price of crude dropped.
He believes there could be more dramatic increases when the wave of Delta cases subsides and demand for oil comes roaring back at a higher pace.
"There continues to be this reality that the world is playing catch-up when it comes to demand, and supply is just not adequately meeting demand," said McTeague.
"It'll obviously be a very real problem once we get past this particular COVID variant."
The price of crude oil peaked this year in early July and sent gas prices in cities like Vancouver to highs of $1.74 per litre.
However, Craig Jerusalim, portfolio manager at CIBC Asset Management, said he believes a recent deal by OPEC plus to ratchet up production will prevent oil prices from reaching much higher levels like US$90 or US$100 per barrel.
OPEC plus is a loose coalition of oil-producing countries that includes OPEC’s official members, as well as Russia, Malaysia and Mexico, among others.
"Outside of COVID Delta variant scares, I think we are rangebound for that low 60s to high 70s range (per barrel) for the foreseeable future," Jerusalim said, meaning current gasoline prices could hold for some time.
Jerusalim and McTeague said new fees and taxes that have been introduced by federal and provincial governments in recent years are also part of the reason why Canadian consumers are noticing some of the higher prices for gasoline.
This report by The Canadian Press was first published Aug. 10, 2021.