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Cheap gas prices will be short-lived

(Photo by Jenn Durfy via Flickr)

Prices for regular gasoline are reduced throughout the province, but it won't be that long.

As of Thursday evening, gas prices ranged from 89.9 cents per liter in Chatham to 97.9 cents per liter in Windsor, while prices in London and Sarnia fell between these two extremes.

Although gas prices typically fall in winter, senior oil and gas analyst at Dan McTeague said that this downward trend can be explained by several factors.

“Gas prices are about 15-16 cents per liter cheaper than they were this time last year,” he said. "I would say that the main factor reducing prices was a decrease in crude oil prices and an additional almost five cents per liter, since we no longer pay carbon tax."

McTeague predicts that these low prices will continue. However, the situation will change in the spring when the federal government reintroduces a carbon tax of 5 cents, which the provincial government is fighting against.

Gas prices peaked towards the end of the summer, but have since seen a declining trend.

“Prices have fallen, although 2018 will continue to fall as the most expensive year since 2014, especially in the last couple of months, when crude oil fell from $ 77 per barrel in early October to a range of $ 40, which is what we pay today "Said McTig. "Most likely, prices will rise again – not immediately, but, most likely, by the end of January."

Although the price of regular gasoline is declining, this does not apply to diesel fuel. Makti said that, for the first time in a decade, diesel prices never fell below the price of gasoline in 2018. He noted that the new rules on ships will play an important role in raising the price of diesel fuel.

“The International Maritime Organization will introduce new rules that will come into force on January 1, 2020, so after a year, when all vessels will run on ultra-low-sulfur diesel fuel, this will become a real obstacle to the supply and storage of diesel fuel.” he said. "This leads to higher prices for diesel fuel, and they will remain so in the next couple of years."

Although the price of gasoline varies by region, Makti said the wholesale price is about the same. He said that the price difference depends on the seller and on whether they switch to retail margin or not.

“The big difference we see from city to city across southwestern Ontario is whether retailers charge 12 cents per liter or zero,” he said.

Gasoline prices are updated regularly and can be found by clicking here.

With files from Matt Weverinka

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