Gasoline prices are on the rise in Toronto, and experts predict they will go even higher.
Roger McKnight, chief petroleum analyst with En-Pro International Inc., says the energy situation globally will drive the gas prices even higher in coming weeks.
“This is going to be a very difficult winter,” McKnight says.
According to McKnight, the surge in natural gas prices, especially in Europe, has impacted the cost of gas at Canadian pumps.
“In the United States, we have the largest exporter of crude in the world and Europe needs what we call distillate gas or diesel to substitute for natural gas,” McKnight says.
This surge in demand of diesel has made it expensive.
“As diesel fuel prices go up, so do the price of gasoline at the pumps,” McKnight says.
Gas prices have increased steadily in Toronto every month since November 2020, when the average retail gas price in Toronto was 99.3 cents per litre according to the data from Statistics Canada.
This is tied for the longest streak of month-over-month increase in gas prices since 1990.
In August 2021, the average gas price was recorded at 137.2 cents per litre in Toronto by Statistics Canada, an increase of 38 per cent since November 2020.
Compared with the lowest gas price of 2020 recorded in April, gas prices were up a whopping 73 per cent this August.
Kumar Kugraj, 50, says this has made his cost of living go up.
“It takes the money of your personal expenses,” Kugraj says as he fills gas in his car at an Etobicoke gas station.
McKnight says previous gas price records are being broken at some places already.
In Toronto, the record was previously set in June 2014 at 140.5 cents per litre, just a few cents higher than the mark in August.
Gas prices have also been impacted by Hurricane Ida halting fossil fuel production in the Gulf of Mexico.
According to the Bureau of Safety and Environmental Enforcement in the U.S., 16 per cent of oil production and 24 per cent of gas production were shut down as of Sept. 23.
“It’s going to be a tight supply of what we call refined product, which is gasoline and diesel,” McKnight says, citing the decreased output from the Gulf of Mexico.
Higher gas prices have made their impact felt in the latest inflation numbers from Statistics Canada.
The consumer price index in Canada rose by 4.1 per cent in August as compared to the same time last year, an 18 year high.
McKnight predicts inflation will go up even more along with gasoline, diesel, heating, oil, and natural gas prices.
He says energy prices not only directly impact retail gas consumers but it also impacts manufacturing.
“It’s all driven by energy,” McKnight says.
All this could be minimized with more natural gas supply according to McKnight as that would reduce the export of diesel to Europe and Asia.
“We can use it [diesel] in our own backyard,” he says.
Back at the pumps, as a day-to-day consumer, Kugraj says he is left with no option due to high prices.
“If it goes up and we got to use it, we got to use it, right?” Kugraj says.