VANCOUVER (NEWS 1130) – The price of gas is hovering around all-time highs across Metro Vancouver, and one analyst says demand may keep it high through the summer.
A litre of regular is averaging $1.65, compared to this time last year, when it was about 40 cents cheaper. Werner Antweiler with the UBC Sauder School of Business says you can blame the price of crude oil and the easing of COVID-19 restrictions.
“That is what is reflected in the gasoline prices that we also see at the pump,” he said. “At the beginning of the year, we were roughly at $45 or $50 (a barrel), and now they’re basically close to $70 and quickly translating into increased prices you see at the pump.”
He says a price war between the Organization of the Petroleum Exporting Countries (OPEC) and other nations such as Russia earlier this year helped keep prices low, but has since eased up, leading consumer costs to creep up again.
Antweiler believes prices will be steady over the summer driving season as more people choose their vehicle over a plane to travel.
“We can certainly expect more travel in the next two months, and that means gas prices will remain high as demand is basically at levels that are closer to 2019 than what we have seen last year,” he said. “The right comparison is not against last year, which was exceptional, but about against 2019. And for that, actually, we see the crude oil prices are roughly at that level that they were in 2019 a little bit higher than back then.”
Antweiler doesn’t think gas prices will rise much higher than $1.60 per litre, and, in fact, may decline if new supply becomes available.
“If, for example, sanctions are lifted against Iran, following maybe a new deal with this country regarding their nuclear program,” he said. “All this basically could actually mean that there may be more supply coming online and if that happens actually we should actually see an easing of prices.”
With files from Hana Mae Nassar