Prince George, B.C. – Just in time for the Victoria Day long weekend, and perhaps lasting considerably longer, gasoline prices are on the rise locally, nationally and in the U.S. as well.

Currently the lowest price per litre of regular gas in Prince George is 99.9 cents, the highest is $1.09.9.  The B.C. average is $1.14.7, the national average is $1.05.6 and there is an upward trend in prices across the board.

The senior petroleum analyst with GasBuddy, Dan McTeague, tells 250 News “a lot of it has to do with the concern in the U.S. Midwest and obviously in Edmonton, where a good amount of our crude is produced north of Fort McMurray, about the fires there which have yet to be quelled.  And of course risk to production continues to add more costs to wholesale prices for gasoline.”

“Remember at this time of year,” says McTeague “that this is the weekend that begins the official launch of summer but it’s also the official launch of driving season and, as a result, we’re seeing not only an increase in demand in Canada but the United States is breaking all records of gasoline consumption.  So any kind of risk, including the possibility of some refineries not being able to get access to crude to produce gasoline has had a lot to do with driving wholesale prices up.”

“We’ve seen that, even though we have a small refinery right here in Prince George, the fact is that we are price chasers, we follow the market and we’ve seen an overall increase of about 9 cents a litre, even before retail and taxes on gasoline going back just over the past ten days.  So that has had a lot to do with why we’ve seen this slow trickle upwards in gasoline prices, especially right here in the B.C. interior and, of course, in Prince George and pretty much everywhere across western Canada.”

So the question is, will prices continue to rise into the summer or will they level off?  In short, according to McTeague, we’ll have to see what develops.  “Well I think all eyes have to be focussed on what is happening with the fires in Fort McMurray.  Where they appear to be tapering off in terms of concern, the fact that some of the producers, Suncor in particular, had to declare (Thursday) that they were not able to supply all of their contracts at least until June has sent a bit of a scare into the market, especially the relevant market for us for gasoline, the U.S. Midwest market fed by prices for gasoline in Chicago.”

“There’s also two refineries that are down in that region and that’s why we’re still not out of the woods yet and we’re really going to have to wait and take it day by day to see where gas prices will go as a result of concern about supply of crude.  This is an unusual outcome.  No one really concerns themselves too much with crude as the world is awash in it, but having lost a million to a million-and-a-half barrels-a-day means that there is now a real draw, for the third week in a row we’ve seen a draw in potential Canadian supplies of oil actually in the United States.”

McTeague says there are a number of factors involved in where prices are going to go.  “We are still paying about what we paid at this time last year.  Prices could very well go up still on the question of volatility but if oil starts flowing again and pipelines are not disrupted one would expect that those prices could also fall.”

“But there are other factors.  We price all of our gasoline in U.S. terms and we also have to be mindful of the sudden U.S. summer demand picture.  As I said earlier Americans are driving further and farther and they are using a lot more gasoline which means refiners have to run at much higher production rates, and that could mean a continuation of higher prices.  But all of these variables really can only be seen week to week and anybody who makes a long-term prediction might be predictably wrong.”

While higher gasoline prices may cause some Canadians to re-think their summer travel plans McTeague says the same doesn’t really apply to people in the States.  “Americans haven’t seen the kind of increases we’ve seen here, the price has been relatively stable and they pay for all their gasoline in their own U.S.-denominated dollars.  You know this time last year a hundred pennies bought you a U.S. dollar, today it takes a hundred-thirty-one Canadian pennies to buy the same.”

“So we’ve lost a bit of purchasing power and that’s always a factor because it goes up and down based on crude’s value.  So crude is one thing but we’re comparing two markets here and crude may continue to add to the supply over-abundance but gasoline is not the same and there are very different dynamics at play.”