Canadians to Get Biggest Drop in Gasoline Prices Since 2009 Amid Fears of COVID Variants – .

Canadians to Get Biggest Drop in Gasoline Prices Since 2009 Amid Fears of COVID Variants – .

Canadians are expected to experience the fastest drop in gasoline prices in nearly 13 years on Sunday, as fears over a virulent new variant of COVID-19 are expected to provide an 11-cent-per-liter break at the pump.

Dan McTeague, president of Canadians for Affordable Energy, said the national average price could drop to about $ 1.32 a liter, but start rising again mid-week.

“(Sunday) is the biggest drop at the pumps we’ve seen since 2009,” he said in an interview.

Global crude oil prices plunged on Friday amid fears over a new variant of COVID-19 called Omicron that prompted Canada to ban entry to foreign nationals who have traveled through southern Africa.

The January crude oil contract fell 13.1% or US $ 10.24 on Friday and currently sits at US $ 68.15 a barrel.

The drop came as US stock markets closed early Friday due to the Thanksgiving holiday.

“Sunday and Monday will be the best days for Canadians to refuel, including British Columbia,” said McTeague.

Even residents of flood-ravaged British Columbia will save on high gasoline prices in the province despite rationing, as severe flooding shut down both the Trans Mountain pipeline and the province’s only refinery.

Drivers of non-essential vehicles can only purchase up to 30 liters per visit at a service station in the Lower Mainland, Sunshine Coast, Sea to Sky region, Gulf Islands and Vancouver Island.

Residents of the East Coast will not reap the immediate benefits of Sunday’s lower prices, as its regional regulated system averages price movements. This provides price predictability but dulls price discounts.

Despite the coming decline, domestic gasoline prices have risen nearly 43% in the past year as the global economy reopens after pandemic lockdowns led to a rebound in crude prices.

McTeague suggested that Canadians shouldn’t be too comfortable with saving energy. He said prices are expected to rise as OPEC and its allies, which meet on Monday, will likely refuse to increase production further. Energy traders are realizing that Friday’s drop was exaggerated and “goes against the fundamentals,” he added.

“My feeling is that the declines that we saw were a bit overbought and overbought, and for that reason I think we could see a bit more balance return to markets and fundamentals by Wednesday,” said McTeague.

“Unless there are more disturbing news of growing lockdowns, I would expect oil prices to likely recover from US $ 3 to US $ 4 a barrel from here.” Monday or Tuesday, which means Wednesday or Thursday we could look at increases in the order of four or five cents a liter.

McTeague said some gasoline savings will continue for a few weeks, but he expects crude to rise to around US $ 90 per barrel, which would translate into prices in Canada exceeding $ 1.50 per liter.

The impending carbon tax increases will further increase prices.

A tax of 2.5 cents per liter including HST will come into effect on April 1, 2022. It will be followed in December by the clear fuel standard that will add an additional 18.1 cents per liter including HST, McTeague said.

Added to inflationary pressure is the Canadian dollar, which is less valuable than when it was at par the last time crude prices were around US $ 80. This reduces the purchasing power for all kinds of products, including energy and food.

The Canadian Automobile Association said that early Saturday morning, Manitoba had the lowest average pump price of $ 1.35 / L, followed closely by Alberta at $ 1.377, while Newfoundland and Labrador was the highest at $ 1.583 with British Columbia at $ 1.558.

This report by The Canadian Press was first published on November 27, 2021.


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