Gasoline prices in Canada are climbing to two-year highs, and could be going higher, according to industry watchers.
In Toronto, gas prices are at 137.9 cents a litre, the highest they’ve been in two years, according to TomorrowsGasPriceToday.com. At the beginning of the year, gas was 10 cents a litre cheaper.
In Vancouver, a fillup costs 149.1 cents a litre, 20 cents more than at the beginning of the year.
Crude oil is the most significant component of gasoline prices. According to a report by industry group M.J. Ervin & Associates, crude oil made up 53% of the cost of gas in March.
One expert opined that gasoline prices tend to be seasonal, and as prime driving season starts up, prices will continue to rise. Porter says gas prices could stay strong until the second half of the year if the global economy keeps improving.
Dan McTeague, a former Liberal MP and founder of price-tracking and forecasting website TomorrowsGasPriceToday.com, says some of the bigger corporate-run stations in Toronto have increased their profit margins.
According to McTeague, those margins have increased to eight cents per litre, up from 6.5 cents per litre 10 months ago.
According to M.J. Ervin, those margins are the smallest component of gasoline prices, at about 7.7 cents per litre in March.
Another major component is taxation, which varies from province to province. Some municipalities, including Vancouver and Montreal, impose their own gas taxes.
McTeague also says part of the increase, particularly for crude oil and wholesale prices, is being driven by speculators in the U.S.
Canadians are very reliant on what the price of gasoline is in the U.S. This problem is particularly bad in eastern Canada, as we don’t have enough domestic supply to cover demand, McTeague says.
Most Canadian oil, particularly from the oilsands, is shipped to the U.S. to be refined. It’s then re-imported at a higher price for use by consumers. Even the refineries in New Brunswick ship nearly 80% of their oil to the U.S.
McTeague is also concerned about how much Canadians are paying for energy — and that includes gasoline for their cars and natural gas to heat their homes.
McTeague also says nearly 25% of our disposable income goes to energy.
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