Gas prices across Vancouver Island have shot up in the past week and experts say they’re expected to rise even higher.
According to Gas Buddy — a digital organization that sources real-time fuel prices — gas in Victoria nosedived in April and May of last year to $0.96 as the pandemic swept across Canada.
Over the past six months or so, prices have sat around $1.23 per litre but since January 2021, they have climbed to around $1.45.
One reason behind this spike could be the rough weather in Texas, limiting supply from refineries, but experts are pointing to a possible alternative reason.
“When everybody got sick with COVID, everybody stopped driving so there was a ton of extra supply around,” said Lindsay Meredith of Simon Fraser University.
“All of that finally got burned up, the Saudi’s said we are not going to add anything more to it…and summertime driving is coming, so let’s shut off supply and watch demand rise.”
As the economy recovers, Meredith says companies may be looking to make up their losses.
Limited supply options to B.C. could also be a contributing factor as well as a potential carbon pricing scheme that the industry is bracing, according to experts.
Meredith adds that an increase in gas prices could have a crippling domino effect by pushing up the inflation rate.
“You jack up the interest rate to slow down the inflating,” he said.
“Well hold it, all those consumers bought all those houses at near-record zero interest rates….. what’s that do to your mortgage payments?”
The solutions aren’t easy.
The Province’s attempts at forcing accountability on price gouging have made no noticeable difference, according to Meredith, and a new refinery could cost billions of dollars.
So consumers should buckle up for prices to hit new highs as the driving season returns.
Julian Kolsut
