Canadians save money at the pump this long weekend compared to last year
Canadians heading out for the July 1 long weekend will find filling up at the pump far less shocking than they did a year ago.
The national average gasoline price hit an all-time high — over $2.10 a liter — on June 12 last year as the fallout from Russia’s invasion of Ukraine disrupted global energy markets.
Prices had barely dropped by the time drivers packed their vehicles for Canada Day camping trips and cottage visits. On June 28, 2022, the national average gasoline price was over $2.05 per liter, according to data from Natural Resources Canada.
However, prices at the pumps are almost 22 percent lower heading into this long weekend. The price-tracking website GasBuddy.com pegged the national average price for gasoline on Wednesday at $1.59 per gallon — with BC residents paying the highest prices and Alberta residents paying the lowest.
“Since the first half of last year, prices have fallen for a variety of reasons, including the ebbing (but not disappearing) of concerns about supply disruptions due to the Russian invasion of Ukraine and slower global economic growth,” ATB Financial wrote in an e-mail. -mail. newsletter on Wednesday.
The West Texas Intermediate (WTI) price benchmark for crude oil is on track to average around $70 a barrel in June, which is close to prices two years ago before the war in Ukraine.
The average WTI price for the first six months of 2023 is on track to be around $75 US per barrel, up from over $100 per barrel over the same period in 2022, ATB Financial wrote.
The current price of crude oil remains above its five-year average of about $53 a barrel, but the year-over-year decline has brought some relief to ailing Canadians.
It is unclear how long these prices will apply
Lower fuel prices at the pump were the main factor behind consumer price inflation cooling to 3.4 percent in May, the lowest inflation rate Canada has seen in nearly two years, according to TD Economics.
But it’s unclear how long lower gasoline prices could last.
Vijay Muralidharan, energy analyst and general manager at R Cube Consulting Inc., said he expects prices to rise throughout the summer as refiners and suppliers begin to pass on costs associated with the new federal Clean Fuel Standard, which is due to take effect on Jan. 1. comes into effect in July.
While refiners have a full year to comply with the new rules, which are designed to put a cap on the carbon intensity of fuels sold in Canada, Muralidharan said he believes consumers will notice the effects sooner rather than later. will feel.
While the Clean Fuel Standard is not a consumer tax, it requires companies that produce or import fuel to gradually reduce the emissions intensity of that process by 15 percent compared to 2016 levels by 2030.
Companies can achieve this by adding a higher percentage of ethanol or biofuels to their gasoline, by reducing their refinery’s emissions through carbon capture and storage or another technology, or by buying credits from other companies with a lower emission profile.
Increase expected this summer
“It’s not going to be an easy task. And that cost will ultimately be passed on to the consumer,” said Muralidharan, adding that he believes the impact of the Clean Fuel Standard will offset any drop in prices that could result from a possible slowdown in the world economy.
“I think there will be at least three to four cents per liter (increase this summer). Unless something catastrophic happens in the market, you will see an increase in gas and diesel prices.”
The federal government’s own estimates are that Clean Fuel Standard regulations will increase the price of gasoline by up to 17 cents per liter by 2030.
