Gas prices are the highest they’ve been in two years and they don’t look likely to go down.
The average gas price in Yellowknife in June was $1.409 per litre, the highest it has been since May 2019. Since January, gas prices have gone up more than 22 cents from $1.189 a litre, the second highest six-month increase in the past decade.
Head of Petroleum Analysis at GasBuddy Patrick De Haan says people are rushing to the pumps faster than oil production can get properly restarted, after disruptions during the pandemic.
“With plenty of opportunities to get out and hit the road this summer, a relatively short summer, Canadians are doing just that and so are their American counterparts,” he said.
“Gasoline demand has staged a remarkable recovery, and it’s for that reason we have seen such a rally and the reason we’re all paying more at the pump.”
De Haan says prices may stay higher than usual because of disruptions petroleum companies have faced in production during the pandemic. That’s because there was a steep drop-off in demand as mandatory isolation orders were put in place, which have created a fairly bumpy road thus far.
“Last year, Canadians parking their vehicles for several weeks, being told to stay at home, oil prices plummeting as a result of low price and low demand left some pretty deep wounds the industry is still healing from,” he said.
“Now there have been various labour challenges bringing some of that oil production back online… this is something that may take not just months but potentially a couple of years for the oil industry to fully get back on its feet again and to boost output to pre-COVID-19 levels.”
The last time gas prices were this high — other than the peak in May 2019 — was because the Organization of Petroleum Exporting Countries (OPEC) had decided to cut oil production to boost prices.
Prior to that, oil prices spiked during the 2008 financial crash.
~ With files from mygrandeprairienow.com