Supply and demand sends Calgary gas prices soaring
Posted May 23, 2013 7:56 am.
This article is more than 5 years old.
Calgary drivers are taking another hit both at the pumps and in the pocketbooks.
The price of gas has jumped for the second time in less than a week and now sits anywhere in the city from 121.9 cents a litre to 131.9 cents a litre.
That’s a 23 cent jump hike in the last few weeks alone.
Former Member of Parliament and founder of Tomorrow’s Gas Price Today, Dan McTeague, believes analysts are overreacting to a shortage in the Midwest.
“This is not unusual, this time of year we see maintenance issues and repair issues drawing down a little bit in inventory, but to justify these increases of as much as 30 cents a litre in the last few weeks, it’s very much an exaggeration,” McTeague tells 660News.
He believes supply should only equate for about a five cent jump at the pumps, not 23.
Right now five refineries in Alberta and the United States are down for various reasons.
“This trough or this low production time in the US Midwest continues right up until the third week of June,” says McTeague. “That could put us very much into a situation given the lag time, to a few days after that. Worst case scenario is that it (higher prices) continues right up until Canada Day.”
Enpro International Senior Petroleum Analyst Roger McKnight disagrees, saying no one is getting gouged.
McKnight says the wholesale cost of fuel, before taxes, is proof.
“The Calgary price today is 96 cents and in Toronto it’s 81, so there’s a 15 cent a litre difference and normally it’s about two cents,” he says.
“I can’t see the cost getting any higher unless we have a complete refinery implosion throughout the Midwest section of the United States,” McKnight tells 660News.
He adds we could be in for more pain at the pumps if the Canadian dollar drops as economists are predicting.
“Crude has to be paid for in US dollars and if the Canadian dollar drops it will take more to buy that crude and the consumer will get it in the end,” the analyst says.
Fuel in Calgary around this time last year was $1.12 a litre.
