Gasoline prices in various Canadian cities jumped overnight after oil prices hit a 2½-year peak amid unrest in Libya.

In Toronto, for instance, an overnight rise of three cents to almost $1.21 for the average price of unleaded gas follows a 1.8-cent increase the day before, according to

In Montreal, a litre of regular gas rose to $1.30 early Thursday. In London, Ont., it was $1.21, and in Ottawa, some consumers were paying $1.20.

'I mean, you're caught between a rock and a hard place.' —Jason Patrick, Toronto driver

In British Columbia, gas prices range from more than $1.25 per litre in many areas of Metro Vancouver to $1.08 or less in the Interior.

Toronto driver Jason Patrick could only shake his head as he forked over $94 to fill the tank of his minivan in downtown Toronto on Thursday.

"It's scary but there's not a whole lot you can do about it," Patrick told CBC's Ivy Cuervo. "I mean, you're caught between a rock and a hard place."

The increase is blamed on the chaos in Libya, where some major oil companies have shut down their oil operations.

The price of oil soared Wednesday to $100 US per barrel, before closing at $98.10.

"[High gas prices] will obviously have a rippling effect throughout the economy and put us very near to what we were in 2008," said Pickering-Scarborough East Liberal MP Dan McTeague.

He said the high gas prices could lead to higher prices for food and other essentials

"And so I think policymakers, beginning with the prime minister, are going to have to start to think very clearly about options as they relate to ensuring that this doesn't have an unintended effect on the economy," said McTeague, a longtime critic of the oil industry.

Some analysts say the key issue is not how high the current price of oil will go, but rather how long it will remain high.

"If we see a situation where oil remains over $100 for a number of months, that will definitely have an impact on consumer spending, consumer confidence, and probably lead to a slowdown in the economy," said Benjamin Tal, a senior economist with CIBC World Markets.   

Ambarish Chandra, a professor who studies oil and gas at UBC's Sauder School of Business, said investor speculation is partly to blame for rising oil prices.

"It seems to be investors betting, or protecting themselves against the possibility, that supply chain disruptions might happen, and oil prices might spike and continue to stay high," said Chandra. "Once we actually see less oil in the supply chain, we'll see higher prices at the pump."

Chandra said prices rose recently in Vancouver partly on predictions the price of oil would rise to this point and he expects gas prices will rise again soon if oil stays this high.

With files from The Canadian Press