Cheap gas prices will be short-lived

(Photo by Jenn Durfey via Flickr)

The price of regular gasoline is down across the province but it won’t stay that way for long.

As of Thursday evening, gas prices ranged from 89.9 cents per litre in Chatham to 97.9 cents a litre in Windsor, while prices in London and Sarnia landed between those two extremes.

Although gas prices typically see a dip during the winter months, Dan McTeague, a senior petroleum analyst at GasBuddy.com, said this downward trend can be attributed to a couple of different factors.

“Gas prices are about 15-16 cents a litre cheaper than they were this time last year,” he said. “I would say the big factor driving prices down has been lower crude and an extra almost five cents a litre now that we’re no longer paying a carbon tax.”

McTeague predicts that these low prices will stick around for now. However, that will change in the spring as theĀ federal government re-imposes a five cent carbon tax, something the provincial government is fighting against.

Gas prices peaked towards the end of summer but have since seen a downward trend.

“Prices have come down, although 2018 will still go down as the most expensive year since 2014 — especially in the last couple of months when crude dropped from $77 a barrel at the beginning of October all the way down to the $40 range, which is what we’re paying today,” said McTeague. “Prices are likely to move back up — not immediately but likely by the end of January.”

Although the price for regular gasoline is down, that’s not the case for diesel. McTeague said for the first time in about a decade, diesel prices never fell below the price of gasoline in 2018. He mentioned that new regulation on maritime vessels will play a major role in diesel prices going up.

“The International Maritime Organization will be putting in new regulations that take effect January 1, 2020, so in a year from now where all vessels have to run on ultra-low sulphur diesel, that’s putting a real crimp on diesel supplies and stockpiles,” he said. “It’s driving diesel prices up much higher and they’re going to remain that way for the next couple of years.”

Although the price of gasoline is different depending on the area, McTeague said the wholesale price is around the same. He said the difference in price depends on the retailer and whether they’reĀ passing on a retail margin or not.

“The big difference we see from city to city across Southwestern Ontario is strictly whether retailers take 12 cents a litre or they take zero,” he said.

Gasoline prices are regularly updated and can be found by clicking, here.

With files from Matt Weverink