Top Stories -   

1

Gas prices expected to keep rising this spring

Viewer

CTV News Video

CFTO News: Dana Levenson on the future of gas prices
CFTO09_gas_prices

A A |  Email ThisEmail  | Print Facebook   

Date: Wed. Mar. 10 2004 8:26 AM ET

Canadian drivers should prepare themselves for some "sticker shock" this spring, as average prices at the gas pumps are expected to soar into the 80-cent range.

The national average for gas prices at the beginning of the year was 69 cents a litre. It's been on a steady trend upwards, with the national average now at about 76 cents.

"I think yesterday we were paying 65 cents a litre. Today it's 70-something," said one Calgary customer. "Too high! It's too much!"

The gas gods are smiling on Torontonians so far this week, where gas can be purchased for 65 cents per litre. In Montreal, prices are above 80 cents.

Last year at this time, with the world bracing itself for the U.S. invasion of Iraq, prices were averaging 85 cents per litre.

This spring, high crude oil prices and a lack of refining capacity are being blamed for the expected rise.

Crude prices, which accounts for at least one-third of gasoline's cost, have risen steadily in recent weeks due to tight global supplies of crude oil. A barrel of crude oil is now going for more than $36 US.

OPEC, the cartel of the world's biggest oil producing countries, has been trying to keep supplies tight and keep the price of crude up. OPEC countries receive American dollars for their oil and the U.S. currency has fallen sharply against most of the world's currencies. As a result, they are getting less for selling the same amount of oil.

OPEC isn't the only story this year. New production from the fields in Iraq is likely to come back online by mid-year.

Russia, another major oil producer that is not an OPEC member, is likely to boost output. This extra supply should help ease demand and ease prices.

In the U.S., new environmental rules are leading to refineries charging more for their products. As a result, U.S. gas prices are nearing all-time records.

Canadian prices are not expected to rise as high as U.S. ones. Most analysts expect oil prices will remain high for several months to come, propping up the cost of gasoline throughout the summer.

That's the opposite of the usual seasonal trend. Prices normally fall in the spring, as the weather warms in the northern hemisphere, and then rise again in the summer as the busy driving season begins.

"The cost of crude oil may dip in the next couple of months by a little bit but don't expect it to result in big drops in prices at the gas pumps," said Craig Alexander, the TD Bank's senior economist.

There should also be volatile regional swings which will be influenced by refineries in those regions, he said.

Based on a report by CTV's David Akin

Share with your social Network:

Facebook DIGG Newsvine Delicious Twitter StumbeUpon Reddit Yahoo! Buzz

 

Advertisement

Contest

Most Talked about Stories

I've been watching this story slowly building steam for several months now. It's definitely something the nuclear industry would rather not talk about because spent fuel storage all over the world is vulnerable too. Other sites haven't been weakened by earthquakes and explosions, but they are vulnerable to other hazards. This danger in Fukushima sheds light on the long-term storage problem that most governments have not dealt with at all.

Dennis Riches, Chiba, Japan

Fukushima Reactor 4 poses massive global risk