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Pump prices jump overnight

Last Updated: Tuesday, May 1, 2007 | 4:00 PM ET

Consumers are aggravated by an overnight spike in the price of gas that's forced motorists to pay as much as $1.28 per litre in Vancouver and $1.18 in Montreal on Tuesday.

"Consumers are exhausted and frustrated," said Bruce Cran, president of the Consumers' Association of Canada.

"We've got no satisfactory explanations as to why these huge price rises take place year after year," he said, noting his group fielded hundreds of calls from angry consumers Tuesday.

In Vulcan, Alta., on Tuesday morning, prices reached $1.05 per litre while stations in Toronto, Stoughton, Sask., and Flin Flon, Man., charged about $1.09. Prices in Woodstock, N.B., reached $1.10.

Industry analysts say an attack on a Chevron ship off southern Nigeria in part caused the spike.

Six foreign oil workers were snatched when gunmen armed with dynamite boarded the ship. A Nigerian sailor was killed in the incident, a Nigerian navy spokesman said.

California-based Chevron said it was closing production on about 15,000 barrels of oil daily because of the attack.

Low supply levels in the U.S. combined with high demand have also contributed to the price hike, said George Eynon, vice-president of the Canadian Energy Research Institute in Calgary.

"In the U.S., we're looking at refinery capacity or refinery utilization only at 87 per cent," Eynon said. "There have been some fires, some outages, some maintenance, and so they're not able to rebuild their stocks. In fact, stocks in the U.S. have been coming down for the last eight to 10 weeks."

Also, in early spring, refiners typically bump up their margins, gearing up for the summer driving months, but Eynon said he expected prices would come down again later in the season.

Oil on Tuesday is trading globally at $65 US a barrel.

According to MJ Ervin & Associates' weekly pump price survey, released Tuesday afternoon, the national average reached $1.10 per litre, up from $1.05 the week of April 24. Stations in Labrador City, N.L., charged the most, at $1.24 a litre, while drivers in Lethbridge, Alta., paid the lowest prices, at 96.3 cents per litre.

With files from the Associated Press
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