It’s not uncommon for gas prices across the country to rise a bit as the weather warms up.
However, this year Canada is experiencing an extraordinary upward push on gas prices and is moving towards having one of the most expensive years at the pumps it has ever experienced.
Prices over the year to date have been on a steady rise, reaching heights not seen since 2014. What’s more is that prices still have the potential to increase further. The national average is around the $1.34 per litre mark.
The strength of the Canadian dollar, or lack thereof, has played a significant role in the price increases Canadians are experiencing in 2018. The rebound of the price of oil to about $75 (USD), coupled with the underperformance of the Canadian dollar against its American counterpart has resulted in price increases because refined oil is sold in American dollars, and Canadian oil is refined in the United States, meaning Canadian suppliers pay more to get oil to the pumps, and Canadians pay more to get it into their tanks.
*Editors Note: The price of oil is expected to reach $100 per barrel by the end of the summer.
The CAD, which has historically risen and fallen with the price of oil, has not risen as much as history would suggest since the bounce back of the per-barrel price of oil.
The price of gas has become a highly politicized topic across the country at both the provincial and federal level. In the Ontario Provincial Election, in a province were about a third of the price of gas is tax, all three major parties have suggested ways to reduce the effects of high gas prices for Ontarians if elected, and attacked each other for not doing enough to lower them.
Trudeau’s liberals have gone as far as to claim that support for and completion of the unpopular Kinder-Morgan pipeline would result in lower gas prices in the Vancouver area, which currently has the highest gas prices on the whole continent ($1.61 per litre).
In the short run, there does not seem to be much that most Canadians can do to ease the financial burden they are set to face at the pumps. The rise in prices is seasonal, and the effects have been magnified by the Canadian dollar.
It seems that for now, all they can do is tough it out.
Brace yourself Canada. It appears more bankruptcies are on the way.
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