It looks as though the break Montrealers have been enjoying from sky-high gas prices is well and truly over.
The average price for a litre of regular gas in the Montreal area, according to GasBuddy.com, sits at 141.9 cents. Prices haven't been this high since last October.
And Dan McTeague, the senior petroleum analyst with GasBuddy.com, suggests the sharp increases earlier this year are happening, and will continue to happen through the summer, for several reasons:
- Higher crude oil prices. McTeague says the price of a barrel of oil on world markets has shot upward, from about $43 or $44 at the start of 2019 to $65 in midday trading on Thursday. As a result, gas prices have gone up at least 25 cents a litre since the beginning of the year.
- Shift from winter to summer. It may appear that gas retailers are stiffing you at the pumps for the privilege of being able to drive when it's nice out, and maybe they are. But McTeague says it is more expensive for oil companies to refine gas for the summer, as opposed to the winter. McTeague says that results in a 3-4 cent difference in price at your local gas station.
- The weak Canadian dollar. The Canadian dollar is much weaker than it was even a year ago ($1.28 Canadian for one U.S. dollar a year ago, versus $1.35 now), and since all commodities are priced in U.S. dollars, that means another 3-4 cents that you have to pay with your Canadian dollars at the pumps.
- World instability. If the Trump administration in the U.S. makes good on a threat to impose sanctions on Iran and its oil, that could mean a few more pennies at the pumps.
- The weather. Hurricanes striking oil-refining areas in the Gulf of Mexico, as we've seen in recent years, have had a significant impact on gas prices — though the effect of a major hurricane usually lasts no more than a few weeks.
McTeague says the days of gas at $1.30 are over — and, basically, $1.50 is the new $1.30.
"I think throughout the summer, your normal will be between $1.45 and $1.50, with many days where you're above $1.50 a litre," he says. "Generally speaking, look for a lot more stations to move to $1.50 or higher during the summer."
The record high gas price in Montreal is 153.4 cents for a litre of regular — that was set back in June of 2014.