Will gas prices continue to rise? Some experts say yes
Posted March 7, 2022 7:30 am.
Last Updated March 7, 2022 7:45 pm.
The price of gas in Metro Vancouver has reached new heights but drivers in the region could face even more pressure in the weeks and months ahead.
The summer driving season is when we usually see seasonal factors like increased demand for gas, refinery maintenance, and the switch to summer blend gas all bumping the price at the pump upward.
Ahead of that drivers have seen prices go as high as $2.099 per litre of regular in recent days.
And skyrocketing prices are being seen on both sides of the border, with gas surpassing $4 per gallon recently in the US.
Patrick De Haan, the head petroleum analyst at GasBuddy, says drivers should prepare to pay more for gas than they ever have before in the months ahead, especially with the current geopolitical tensions surrounding Russia’s invasion of Ukraine also adding to challenges.
“This is a milestone that was hard to imagine happening so quickly, but with bipartisan support of severe sanctions on Russia, is not exactly surprising – it is the cost of choking off Russia from energy revenue,” said De Haan.
The price of gas has been pushed further into record territory as the price of oil touched $130/barrel briefly Monday morning, amid the conflict in Ukraine.
“As Russia’s war on Ukraine continues to evolve and we head into a season where gas prices typically increase, Americans should prepare to pay more for gas than they ever have before. Shopping and paying smart at the pump will be critical well into summer.”
Another day, another record breaking price at the pump. Why do I feel lucky gassing up last night at $1.93.9 a litre? @CityNewsVAN @CityNewsTraffic #Wow #GasPrices pic.twitter.com/ChBp4buwp0
— Dean Recksiedler (@RecksiedlerDean) March 6, 2022
CityNews business editor Mike Eppel notes while the price of crude oil has pulled back a bit from its earlier high Monday, it is still flirting with levels not seen since 2008, heading into the financial crisis.
While drivers’ wallets may be getting the brunt of rising prices, it’s still too soon to predict whether air passengers will see similar increases. One airline passenger advocate suggests it is not clear if airlines will tack on additional surcharges if gas prices continue to trend higher.
“Because we don’t simply see oil prices soar but we are seeing significant inflation. That means that passengers’ discretionary income — income they can spend on vacations, for example, — may shrink,” explained Gábor Lukács.
“When it comes to leisure travel, as opposed to business travel, the demand may actually plummet in light of the current economic trends.”
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He notes business travel may not be hit quite as bad, though the pandemic and its shift to more virtual work has changed the way many conduct meetings.
“When we look at the picture as a whole, airlines may wish, may try to raise prices, but it’s unclear at this point whether the demand to support will be there.”
In addition to external pressures, Metro Vancouver drivers are also hit with additional taxes that push prices higher.
In this region, drivers pay 37 cents per litre to the province, which includes an 18.5 cent TransLink tax. It also factors in a 10 cent per litre in carbon tax which, in April, will go up to 11 cents.
-With files from Denise Wong and Claire Fenton
