The price of gasoline continues to climb around the globe, and a spokesperson for GasBuddy says additional spikes could yet be coming.
Patrick De Haan is Head of Petroleum Analysis at GasBuddy. With stations in Winnipeg selling gas for 172.9 cents per litre, De Haan says that is nearly 10 cents per litre higher than one week ago and nearly 50 cents higher than one month ago. It is up over 60 cents per litre since January 7th, when the average price was 112.9 cents per litre.
Middle East unrest to blame
De Haan says this is all a result of what is happening in the Middle East between the United States and Iran. He explains that attacks on vessels in the Strait of Hormuz has led to the closure of the strait. According to De Haan, this vital waterway carries nearly 20 million barrels of oil on a daily basis.
“With that oil being blocked, the global market is vastly in need of additional crude oil,” he says. “That supply and balance has now pushed oil up to nearly $100, and that has driven up gas prices across the global economy, not just Canada and not just North America, but even in southern Manitoba.”
De Haan says that as long as there is no solution to the strait blockage, gas prices might continue to climb. He says prices in Manitoba are inching closer to record highs felt in 2022. According to GasBuddy, the regular price of gasoline in June of that year was selling for 206.9 cents per litre in Winnipeg.
“Back in 2022, it was Russia’s invasion of Ukraine, along with the reopening economy that caused oil prices to surge,” he recalls. “So, we could set records if the U.S. can’t figure out a peace deal or a solution with Iran soon. It is possible that gas prices could rise to those previous record levels.”
Time of year is also a factor
De Haan says the other factor driving up gas prices is that we are now in a season of transition, as we move towards a cleaner, more expensive gasoline that is used in summer. As temperatures rise, De Haan says there is more travel and more consumption. A third factor is refinery maintenance, which happens before the start of the summer driving season.
“All of these factors (are) pushing gas prices up and we may not see much improvement until there is some sort of resolution with either the strait reopening or a potential peace deal between the U.S. and Iran,” adds De Haan.
De Haan says because we are now in this season of transition, even if a peace deal is reached, it could be later this year before prices drop considerably.
Meanwhile, as of Wednesday, the average price of gas in Manitoba is 168.3 cents per litre. That is the 4th lowest, behind only Alberta, Saskatchewan, and Ontario. The most expensive province is B.C. at 192.9 cents per litre. Sylvan Lake, Alberta currently has the cheapest average cost in Canada at 145.9 cents per litre. The city with the most expensive average cost is White Rock, B.C. at 212.9 cents per litre.