Pumped up: Hamilton gas prices have hit 2nd highest level on record, expert says
Cab drivers among those being hit hard, but expert says prices are nearing their peak
Hamiltonians are feeling pain at the pumps with gas prices nearing all-time record levels, according to a petroleum analyst.
The average retail price for gas in the city hit 135.73 cents per litre on Wednesday. That's the second-highest price Hamilton has ever seen, says Patrick De Haan, head of petroleum analysis for GasBuddy.
"That's up ... 5.6 cents a litre from a week ago. Also up about 32 cents a litre from a year ago," he said.
Prices peaked locally in 2014, but the past week has marked the highest prices GasBuddy, which provides real-time pricing information, has recorded since.
The high costs are hitting cab drivers especially hard.
"For a normal guy, it's probably an extra, at least, 30 to 40 per cent more in fuel costs, which is absurd," said Anthony Rizzuto, president of Blue Line Taxi.
Jagtar Singh Chahal, Hamilton Cab's chair and CEO, echoed those comments, saying it impacts the industry as a whole while it struggles to recover from the impacts of COVID-19 and competition from Uber and other ride-hailing companies.
Switching to hybrids
A city report from February found more than 100 taxi drivers had surrendered their plates even before the pandemic.
"There are fewer cabs than before the pandemic. It's not an incentive to attract more and more drivers," said Chahal.
He said in past years, the city allowed local cabs to increase their fare rate due to high gas prices.
One way cab companies are trying to mitigate expenses is by switching to hybrid and electric vehicles.
Both companies said they are actively working to add more environmentally friendly options to their fleets.
Why are gases prices so high?
The reason gas prices have shot up, De Haan said, is because oil production hasn't caught up to the increased demand for gas now that more people are leaving home.
"Until oil supply returns to pre-COVID levels like demand has, we're going to be paying for it," he said.
Another factor is a truck driver shortage, he said, which means gas stations don't have as much access to fuel.
Cheaper gas, De Haan said, can be found at some wholesale stations, and stations in Caledonia.
And there's hope that in the coming months prices will eventually fall — barring natural disasters.
"Oil prices have slipped a little bit here in the last few weeks," De Haan said.
"If we see some sort of major disruption in supply and demand, like a major hurricane or something, in which there's a significant portion of U.S. refineries shut down, that could impact Canada. But barring that, I think we're pretty close to a peak."
Once summer vacations wind down and schools reopen, the analyst said, prices might start to come down.
"There should be some relief coming in the fall once we start to see demand decline ... but of course COVID remains a big wild card."