Gas prices took a considerable jump in British Columbia this week, and one expert says, get used to it. The days of cheaper oil and gas may well be behind us, says Petroleum Analyst for gasbuddy.com Dan McTeague.
McTeague is a consumer advocate specializing in energy and current affairs. Known as Canada’s “Gas Guru,” he founded tomorrowsgaspricetoday.com to better help motorists anticipate the price of gasoline in advance across Canada. He has over three decades of experience in the petroleum industry, and spent 18 years as a Member of Parliament.
On Wednesday in Kimberley, gas was $1.16 per litre at some locations, and by Thursday morning, the price per litre was $1.25.9
“The price hike follows a big 60 cent a gallon rise in the gasoline futures market in Chicago,” McTeague told the Bulletin in a phone interview. “This is the market which determines the price we pay for gasoline across all of Western Canada except the BC Lower Mainland and Vancouver Island.”
There are three main causes for the spike, although McTeague also said that the wholesale price of gas has been creeping up for the past several weeks and at some point retailers simply cannot absorb it any longer and have to raise prices.
“These prices have been going up for weeks and retailers have been holding off. The writing was on the wall with wholesale prices going up. The retailer was seeing those increases and knew what they’d be paying for the next delivery. A big warning sign was Tuesday night, when we saw the wholesale price rise by 7.4 cents a litre.”
Once the wholesale price is set, McTeague says, within 36 hours, that’s the price gas stations pay for their next shipment.
Factor one in the price increase is a response to a leak found on the all important Explorer Pipeline, which delivers fuel from the US Gulf Coast to the US midwest.
“Repairs are underway and once finished, we should see prices taper off in about 10 days,” he said.
Another issue is seasonal refinery maintenance which many midwest refineries delayed to help offset the supply crunch that occurred after Hurricane Harvey hit Texas.
“Some of these refineries were supposed to go offline at the end of August, and delayed. Now quite a few are offline at once.”
Finally, demand for fuel is skyrocketing in the US and that is eating up any over-supply. Despite all the talk of electric cars and green energy, McTeague says American baby boomers are still hooked on gas and there’s no end to that in sight.
“It’s a sign of the times,” he said. “Oil prices are firming up, over supply is drying up and American demand is strong and not giving up.The days of cheaper oil and gasoline may well be behind us.”