High gas prices may mean tough summer for motorists

Canadians have been hit by spiking gasoline prices ahead of Easter weekend, but some analysts say the worst is yet to come for motorists gearing up for the summer driving season.

Canadians have been hit by spiking gasoline prices ahead of Easter weekend, but some analysts say the worst is yet to come for motorists gearing up for the summer driving season.

Prices reached 140.1 cents a litre in Toronto and 147.9 in Montreal on Wednesday. That's about eight per cent higher than a year ago, even though crude oil prices are lower.

Crude for May delivery fell $2.54 at $101.47 US a barrel Wednesday on the New York Mercantile Exchange. A year ago, crude was trading at $104 a barrel.

Despite that, gasoline prices could hit record highs of between 143 and 147 cents a litre in southern Ontario by the end of April, analyst Roger McKnight of Oshawa-based En-Pro International Inc. said Tuesday.

"It's going to hit and stick," McKnight said. "Prices increased nine of the last 10 years in March and April, but this year they started in January and they are continuing to roll."

Jason Parent, senior associate at the Kent Group, predicted prices at the pump will rise another eight cents above current pump prices over the coming months.

Seeking an explanation

Gas price watcher Dan McTeague said the oil industry usually tries to explain the annual increase by saying it's to cover the cost of converting from winter to summer fuel.


How do you conserve gas? Take our survey.

But McTeague, a former Liberal member of Parliament and a harsh critic of the oil industry who runs the website Tomorrow's Gas Price Today, called that a "lame and well-worn excuse."

He said fuel specifications in Canada — unlike the U.S. — don't change with the seasons.

McTeague's website includes these other price increase forecasts per litre in Canada compared to a year earlier:

  • Ottawa: 133.7 cents (126.4).
  • Winnipeg: 115.9 cents (113.9).
  • Calgary: 113.9 cents (110.9).
  • Vancouver: 143.2 cents (135.3).

In Nova Scotia and New Brunswick, gas prices are set by local authorities — New Brunswick on Thursday and Nova Scotia on Friday. 

Finance Minister Jim Flaherty said rising gas prices "are a concern for everyone" but the trend isn't limited to Canada.

"People around the world are seeing oil prices go up, the Americans, the British, everybody is seeing the same phenomena. The reason for that, of course is because the price of oil is a global price, it's not a national price," he told reporters in Vancouver.

"In terms of our own country, of course, we export oil, so there's some benefit to Canada, in terms of prices going higher. But it's more difficult for all of us who buy gasoline at the pumps."

Crude shortage not the problem

Tips on saving gas

Jim Davidson, author of 75 Ways to Save Gas, offers this advice:

  • Avoid using air conditioner and defroster where possible.
  • Service your vehicle regularly.
  • Check tire pressure monthly.
  • Avoid speeding.
  • Don't leave your vehicle idling.
  • Keep windows rolled up during highway driving.

Gas prices usually rise in the spring as refineries shut down to convert from producing diesel to gasoline as the summer driving and vacation months approach. This year, however, shutdowns of four refineries in Pennsylvania and five in Europe have severely cut North American supplies, McKnight said.

A shortage of crude oil didn't seem to be the problem.

The American Petroleum Institute said late Tuesday that U.S. crude inventories rose 7.8 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 1.9 million barrels.

However, concerns that a shortage could come about if a conflict between the U.S. and Iran escalates in the oil-rich Middle East have added pressure to the price of crude in recent months.

With files from The Canadian Press