Economy

As crude oil falls, lengthy weekend drivers get pleasure from cheaper gasoline

Amanda Stephenson, Canadian Press

Printed Friday, September 2, 2022 at 6:10AM EDT

Final up to date on Friday, September 2, 2022 at 6:10AM EDT

The ultimate lengthy weekend of summer season might be low cost for Canadian drivers, with gasoline costs heading into the Labor Day vacation at their lowest since late February.

The nationwide common retail value of standard gasoline was 161.1 cents per liter on Thursday, in keeping with Pure Sources Canada. Within the final week of February, simply earlier than the consequences of Russia’s invasion of Ukraine on February 25 started to be felt on the gas pumps, Canadians noticed the common value of gasoline final within the $1.60 vary.

Petrol costs have progressively risen since then, reaching a peak of 215.1 cents per liter in early June. Filling up over the Canada Day lengthy weekend value drivers greater than $2 a liter on common, and the August civil vacation did not fare significantly better with common costs within the 180 cents per liter vary.

However costs have been falling steadily since August resulting from falling crude oil costs and shrinking US refining margins. On Friday, the October US crude contract traded at US$86.61 a barrel, the bottom since late January.

R Dice Consulting Inc. Vijay Muralitharan, managing director, mentioned what occurred was a type of demand destruction. Skyrocketing inflation in the USA, the most important world marketplace for gasoline, has compelled some drivers to chop again on their consumption. And with many economists speculating about the opportunity of a world recession, oil merchants are jittery.

“The warfare in Ukraine added a 15-cent per liter premium to petrol costs at its peak,” Muralitharan mentioned. “Now that premium is coming down considerably. Not as a result of the warfare is over, however due to concern of demand. There’s loads of pessimism within the oil markets proper now.”

Muralitharan mentioned he believes petrol costs will rise once more if members of the Group of the Petroleum Exporting International locations determine to boost crude manufacturing in response to decrease costs.

Whereas petrol costs have fallen throughout the nation, gas costs fluctuate considerably by area resulting from components resembling transport prices and native taxes.

Based on gas value monitoring web site GasBuddy.com, gasoline in British Columbia averaged 185.0 cents per liter over the Labor Day weekend.

The most affordable gasoline may be present in Alberta, the place the common is at present 140.8 cents per litre.

This report by The Canadian Press was initially printed on September 2, 2022.

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