Gas prices are jumping up across Saskatchewan and a gas analyst is warning that it could get worse before it gets better.
The average gas price in Regina and Saskatoon is around 97 cents per litre, but on Tuesday morning there were still a few gas stations holding out around 87 cents per litre.
“What has happened is that the wholesale price for gas has risen probably to the tune of about six cents per litre over the last week or so,” explained Dan McTeague, senior petroleum analyst at GasBuddy.
With wholesale prices around 91 cents per litre, McTeague expects to see prices at the pump go up to $1.02 per litre over the next week.
“Some will, of course, stay at 97 cents a litre, but if you see those prices well below 95 cents a litre, look for those prices at those stations to go up dramatically,” he said. “I guess the message here is, really, if you see gas below 94 or 95 cents a litre, pick it up right now because it’s not going to last.”
McTeague said you can blame the jump on warm weather, which is driving up demand.
“There’s also another factor, of course, this time of year a lot of refineries use this slower demand period — traditionally we would see that — in order to go through maintenance,” he continued. “Refineries have to go through a rather significant downtime period in order to repair and get ready for the next seasons ahead, otherwise they risk doing some serious damage.”
McTeague said refineries are usually back up to full capacity by the end of September or early October.
He said the small drop in supply combined with higher than normal demand has been driving wholesale prices up.
“Demand has been a little higher than expected in the U.S. and here in Canada and you can’t really blame anybody,” he said.
McTeague expects prices to stay higher through Canadian Thanksgiving before dropping in mid-October.
Gas price increase after Hurricane Harvey not justified
After Hurricane Harvey hit Texas, McTeague noted that gas prices did initially spike in Canada following the U.S. mid-west.
“It became quite apparent that the increase then of about 15 cents a gallon really wasn’t justified. There was no direct immediate draw on mid-western U.S. supplies or here in Canada,” McTeague admitted.
He said prices went up very quickly in reaction to storm damage hitting 25 per cent of the gasoline production output in the U.S. McTeague said there was a quick realization that any shortage from the Texas refineries would not draw on supplies from Canada.