Gas prices jump overnight

Gas prices jump overnight

Residents of Clearwater get an after-Hallowe’en fright when the price of gasoline takes a sudden jump

Times Staff

Residents of Clearwater and the rest of British Columbia got an after-Hallowe’en fright when the price of gasoline took a sudden jump.

During the middle of last week, the price of regular gasoline in Clearwater went up to around the $1.25 per litre mark. By the weekend it had increased to $138.9 – more than an 11 per cent increase from where it had been mid-week.

Similar price increases were recorded throughout the province.

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“Everyone needs to fasten their seat belts, as it’s going to be a rough ride at the gas pumps for awhile,” said Dan McTeague, a senior petroleum analyst with GasBuddy.com.

“I don’t see a downward trend in gas prices for at least the next two weeks.”

Known as Canada’s “Gas Guru,” McTeague founded tomorrowsgaspricetoday.com to better help motorists anticipate the price of gasoline in advance across Canada. He has over three decades of experience in the petroleum industry and spent 18 years as a Member of Parliament.

“The price hike follows a big 60 cent a gallon rise in the gasoline futures market in Chicago,” McTeague told Black Press in a phone interview. “This is the market which determines the price we pay for gasoline across all of Western Canada except the B.C. Lower Mainland and Vancouver Island.”

“Most of the fuel delivered to the B.C. Interior comes from Edmonton and Edmonton fuel pricing is based on U.S. mid-west gas price futures set on the Chicago Mercantile Exchange.”

There are three main causes for the spike, although McTeague also said that the wholesale price of gas has been creeping up for the past several weeks and at some point retailers simply cannot absorb it any longer and have to raise prices.

“These prices have been going up for weeks and retailers have been holding off. The writing was on the wall with wholesale prices going up. The retailer was seeing those increases and knew what they’d be paying for the next delivery. A big warning sign was Tuesday night, when we saw the wholesale price rise by 7.4 cents a litre.”

Once the wholesale price is set, McTeague says, within 36 hours, that’s the price gas stations pay for their next shipment.

Factor one in the price increase is a response to a leak found on the all important Explorer Pipeline, which delivers fuel from the US Gulf Coast to the US midwest.

“Repairs are underway and once finished, we should see prices taper off in about 10 days,” he said.

Another issue is seasonal refinery maintenance which many midwest refineries delayed to help offset the supply crunch that occurred after Hurricane Harvey hit Texas.

“Some of these refineries were supposed to go offline at the end of August, and delayed. Now quite a few are offline at once.”

Finally, demand for fuel is skyrocketing in the US and that is eating up any over-supply. Despite all the talk of electric cars and green energy, McTeague says American baby boomers are still hooked on gas and there’s no end to that in sight.

“The American economy is on fire right now. People are working, wages are up and the demand for fuel has shot up,” he said.

“It’s a sign of the times,” he said. “Oil prices are firming up, over supply is drying up and American demand is strong and not giving up.The days of cheaper oil and gasoline may well be behind us.”