Short-Lived Savings: Experts Predict Extended Volatility at the Gas Pump
Darnell Barrett says he’s still shocked every time he fills up his tank.
“It’s incredibly frustrating,” he said, as he was filling up his car Friday morning.
He recently sold his Hummer, as payments for gas were becoming far too expensive. Barrett says the last little while has been a challenge.
“Even if you got it (money), you only have it because you spend your money wisely, but when it’s being taken out of your pocket, with gas prices like this, it’s a completely different story and it’s a crunch for everybody,” he said. “I think it’s just ridiculous.”
Philip Intac is also feeling the pinch at the pump.
“The higher it goes, it’s not good for our budget,” he said. “It gets so expensive and it takes a little part of that pie, you know.”
He said he wants to see prices drop sooner rather than later.
“They’re not normal prices. They are fluctuating and it’s not good,” he said.
Gas prices did fall in Canada this week, following the signing of a tentative peace agreement between Iran and the United States, that includes the reopening of the Strait of Hormuz.
As of Friday morning, gasoline was an average of 163.9 cents across Canada according to GasBuddy, which is down over five cents from last week and down almost 25 cents from last month’s average.
Still, some experts caution the relief may be temporary.
Gas prices remain uncertain
“I mean this is probably as good as it’s going to get,” said Dan McTeague, the president of Canadians for Affordable Energy.
“We are going to see an increase of five or six cents per litre on average across Canada. We have had this on again, off again, there is a peace agreement, there is an MOU that’s to be signed, not to be signed. There is always two steps forward and two steps backwards.”
McTeague says this is unfortunate because the world is not getting any closer to resolving the deficit and shortages around oil products.
“Historically, we have never seen anything like this before,” he said.
“We know that markets are basically trying to discount as much as they can, but there’s only so much short selling and optimism.”
“They bought the idea that the war premium is over, but they’ve completely forgotten the global oil deficit, which is extreme and very serious,” he said.
McTeague points out that this will likely mean high gas prices across the country will remain for a while.
He says the average price of gas last year in Canada, was around 135 cents. He says Canadians should not expect to see prices that low until next year.
“Unless there is some kind of economic collapse, or other geopolitical factors that see a complete displacement, we’re not going to see those prices, certainly not in 2026, and not likely through the first half of 2027,” he said.
“I think by late 2027, 2028, things should be back to normal.”
The Canadian government also suspended the federal gas and diesel tax back in April, which will remain until September 2026.
The move was expected to reduce prices by 10 cents per litre for gasoline and four cents per litre for diesel.
“Even with the temporary suspension of federal gas taxes, we’re looking at prices in Manitoba and other places across the country being 20 to 30 cents higher than they were before,” said Shiu-Yik Au, an associate professor in the accounting & finance department, at the University of Manitoba.
“This is quite a large increase, particularly in a time where, you know, we’re just exiting (a) recession, or in the middle of a recession and we’re still experiencing inflation at the grocery store.”
As Canadians head into summer, gas prices remain uncertain, with experts warning further relief may not come anytime soon.
Au says it’s impossible to predict what is going to happen in the Middle East in the next few months.
“We can’t depend on what’s going to happen there, but we can depend on ourselves,” he said.
Au said there are a number of things that “regular Canadians are going to have to look at,” in the coming months.
He said these include, “whether or not we are going to get any political relief, or tax relief from the federal government or provincial governments; whether or not we’re going to get relief from the Bank of Canada in the form of lower interest rates to help boost the economy; or whether or not Canadians themselves, can try and save a little bit extra to be able to offset some of the increases in costs.”
This article was first reported by CTV News
