Gas prices have spiked across the country, with record highs in many places including Hamilton, in recent days.
Just a week ago, prices were at $1.43 per litre. Monday saw prices around $1.51 per litre on average in Hamilton — a record high for the city, according to Patrick De Haan, head of petroleum analysis at GasBuddy, a gas price tracker website.
And prices aren’t likely to go down anytime soon, he said.
“As we continue to see geopolitical tensions mount on top of an imbalance between supply and demand because of COVID, there’s unfortunately a lot of upward pressure coming. I don’t see any good news in terms of falling prices anytime soon,” he said.
If Hamiltonians are looking for relief at the pumps, there may be some cheaper options in surrounding areas, such as Costco in Ancaster and the York General Store near Caledonia, De Haan suggested.
“Even if you’re in an area with stations that are higher, I would always advise people to shop around just to see if there’s a lower price nearby,” he said.
Multiple factors at the root
According to one expert, the reasons for the influx vary.
Atif Kubursi, professor emeritus of economics at McMaster University, said a single cause doesn’t exist, but rather many of them work to increase gas prices across Canada.
At the root of the issue, he points to local challenges: the impacts of the COVID-19 pandemic, the weather and the economy. But global affairs have quite the impact, too.
“The economy is recovering, and the weather is cold. So that cold weather, political instability, COVID disruptions… The world is not in a very stable situation,” he said.
He said the “elephant in the room” comes from the underestimation of these negative impacts.
Other analysts have pointed to tensions between Ukraine and Russia, which supplies much oil and gas to the rest of the world — which could be cut off if the situation escalates.
Several factors determine the cost of gasoline, but the price of oil is the biggest. Prices plummeted when travel stalled at the beginning of the pandemic and factories closed, but crude prices have since crept back up to a seven-year high.
Al Salazar, vice-president of intelligence at energy analytics firm Enverus, previously told CBC the jump in price is also connected to depleted crude oil and product inventories, which left less of a buffer for interruptions or an unexpected spike in consumption.
While some might believe that the government is partially to blame for the increased price, Kubursi said it’s not in the way we might think.
That’s because of the supply and demand of the oil market. He highlights that it’s not just the physical suppliers and demanders, it’s influenced by things like the stock market.
“There’s so many participants in this market. But the government has all the levers to influence it,” he said.
“They might not be able to control it, but they certainly influence it.”