The price at the pump is currently hitting Albertans and all Canadian pockets hard as gas prices are soaring. Unfortunately, there is no end in sight any time soon as it is predicted that by the time summer rolls around it will be even worse.
Currently, as of April 26 gas prices in Vermilion as well as in the cities are sitting at approximately 122.5 L according to CAA. Last week, the price at the pump was 115.4 L so in just one week it has jumped .07 cents and it is expected to get much higher yet.
A year ago, gas prices plummeted to 063.5 L at the beginning of the pandemic, the lowest they have been since the 2008 financial crisis; due to a lower demand as people were not out travelling as much. Supply and demand is one of the largest reasons for fluctuations in gas prices. Currently, we are still in the middle-to end of the pandemic, thus still causing a lower demand for gasoline as more people are working from home and have fewer places to travel as some businesses are still in a COVID-19 restricted status.
The second cause of gas prices to plummet last year was the cost of crude oil. When COVID-19 hit, it rocked economies around the world causing OPEC and its allies to reduce the production of oil in an attempt to up the oil prices. Since last year, OPEC has not increased oil production fast enough to move with the increasing demand this year, therefore oil prices are currently sitting at around $60 US a barrel the highest it has been in over a year, and it is expected to climb even higher by summer with some predictions saying it could rise as high as $72 US per barrel.
Canadian oil producers have not helped the situation either. Canada was the world’s 4th largest producer of petroleum and other liquids in 2019, but in the first half of 2020, Canada’s production declined by approximately 20 per cent from its 2019 average of 5.5 million barrels per day. Canada’s production of petroleum and other liquids declined due to the global crude oil price drop, reduced demand for crude oil for refined petroleum products in Canada and the US, as well as the curtailments imposed by the government of Alberta, according to U.S. Energy Information Administration.
Another factor that is causing this hit to Albertans pockets is Trudeau’s carbon tax on fuels, and to top that off Trudeau plans to raise the carbon tax on fuel from $30 per tonne to $170 per tonne by 2030 in the attempt to exceed cutting greenhouse emissions by 30 per cent by 2030; which could raise gas prices by more than 37.5 a litre by 2030.
Summertime travel as more restrictions let up will also increase the demand of fuel while the supply still lingers behind causing summertime gas prices to jump again.
If gas prices continue to rise as per predictions we might all be forced to find ways to reduce our cost of living so we can afford to drive ourselves to work, or we will be looking for alternate modes of transportation.