The last long weekend of summer will also be the cheapest for Canadian motorists, with gas prices heading into the Labor Day holiday the lowest since the end of last February.
On Thursday, the national average retail price for regular gasoline, according to Natural Resources Canada, was $1.61 per litre. The last week of February, just before the effects of Russia’s February 25 invasion of Ukraine began to be felt at the gas pump, was the last time Canadians saw the average price gasoline to be around $1.60.
Gasoline prices rose steadily thereafter, peaking at $2.15 per liter in early June. It was costing drivers more than $2 a liter, on average, to fill up before the Canada Day long weekend.
But prices have been falling steadily since last month, partly because of lower crude oil prices and also because of lower refining margins in the United States. On Friday, the U.S. October crude contract was trading at US$86.61 a barrel, its lowest level since late January.
A Canadian energy price watcher, Vijay Muralidharan, managing director of R Cube Consulting, believes soaring inflation in the United States, which is the world’s largest gasoline market, has forced some motorists to reduce their consumption. And since there is risk of a global recession, oil traders are getting nervous.
“The war in Ukraine added a premium of 15 cents a liter to gasoline prices at its peak,” Vijay Muralidharan said. “Now that bounty is dissipating somewhat. Not because the war is ending, but because of fears of demand. There is a lot of pessimism in the oil markets right now,” he adds.
Mr Muralidharan thinks prices could be maintained at the current level, but if members of the Organization of the Petroleum Exporting Countries (OPEC) decide to change crude oil production in response to lower prices, it will again drive up the cost of gasoline.
Although gasoline prices have fallen across Canada, the cost of fuel varies significantly from region to region due to factors such as transportation costs and local taxes.
According to fuel price tracker website GasBuddy, British Columbia is selling its most expensive gasoline ahead of Labor Day weekend, at an average of $1.85 cents per liter. The cheapest is in Alberta, where the average is currently $1.40 per litre.