Last week saw our gas prices fall 3 cents per litre, going from 144.9 to 141.9 cents per litre. According to Gas Buddy's Head of Petroleum Analysis Patrick De Haan, this could just be the start of a potential price drop.
"I do think that we could see another couple weeks of falling prices. We could see prices in Strathmore falling closer to $1.35, maybe $1.30 a litre in the next couple of weeks if things shake out the way they look to be," he said.
That's definitely welcome news to anybody looking to save some cash for holiday shopping, but it might also be a bit surprising if you've been following global oil prices. De Haan explained the price of a barrel has gone up to $81.00 a barrel, compared to earlier when it was as low as $74.00 a barrel. While you may expect a rise in oil costs to directly cause a rise in gas prices, De Haan said that isn't necessarily the case.
"The price of gasoline oftentimes lags behind changes in the price of oil, and that's because stations take a little bit longer to lower the price to where wholesale costs are. And that is why in this particular instance gas bars have been very slow to lower prices. And because they haven't fully passed along the decrease, they have more potential that they can go down before they have to start going back up again."
De Haan added that while we could enjoy falling prices, the rise in oil prices may prevent the gas from going even lower than it could've, had the oil prices remained the same. As for why oil costs are rising, De Haan explained it's due to a lot of global factors.
"The EU price cap on Russia came into effect; Russia has promised retribution by slowing down or halting exports of oil to the EU. Of course, there's the sanctions on Russian oil by the EU and the G7, so there's a lot going on. In addition, China, which had been seeing large cities being shut down because of covid cases surging, is now potentially going to reopen some of its economy, and that could push oil prices up on the fact that reopening Chinese cities could mean more demand. So there's a lot of moving parts to this, especially the price cap and how Russia may respond. It'll take a couple of weeks for us to fully understand how oil is moving in response to those, but for now, prices should continue to moderately decline over the next week or so."
In the summer, we can often see gas prices rise during peak travelling times, as demand outweighs supply. As we approach Christmas, De Haan said this won't be a large factor, since a lot of people stay close to home for Christmas. While there will be families travelling or people driving long distances to see family during the Christmas season, this is balanced out by all the people who aren't driving and are just staying home.
Gas in Strathmore is still higher than stations in Calgary with some reporting as low as 125.9 De Haan says this could be down to one simple issue that smaller communities face and that is lack of competition.
"It certainly could be because of less aggressive competitors and maybe the de facto way of doing business is that other areas like Calgary, bigger cities, may be more competitive. [In] Strathmore there could be a lack of competition if stations all know that nobody lowers prices. They may not want to be the first ones lowering the price," he said.
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Fri, Apr 26, 4:30 PM
