Gas prices in Winnipeg are approaching record highs; Here's why

WINNIPEG -

Gas prices in Winnipeg are approaching record highs and, according to one analyst, the pandemic is partly to blame.

“A lot of stations are jumping to $1.429 [per litre], which is close to the highest price it’s been. The average in Winnipeg is still about $1.335 (per litre), at least at this moment,” said Patrick De Haan, head of petroleum analysis at GasBuddy, in an interview on Tuesday afternoon.

“So we haven’t quite gotten the average price to that record level, but indeed we’re getting very close.”

De Haan predicted that most gas stations will likely raise their prices, putting the city on the cusp of its highest gas prices since 2008, when they reached $1.436 per litre.

“So we’re getting there. Getting close to the highest prices we’ve ever seen in Winnipeg,” he said.

According to De Haan, there are a number of reasons gas prices are increasing, including COVID-19 imbalances and Hurricane Ida shutting down a good portion of oil and natural gas production in late August.

He also said an energy crunch is forming in a number of places around the world.

“China clamping down on electricity consumption because of a lack of coal, a natural gas shortage in Europe that’s pushing the price of natural gas globally up to the highest level seen in years, and that’s also affecting and pushing up the price of oil,” he said.

De Haan explained the price of natural gas has affected the price of oil because gasoline is the predominant ingredient in crude oil. Therefore, when the price of the raw ingredient increases, it affects the price of refined gas.

As for anyone who thinks the upcoming Canadian Thanksgiving has anything to do with the increased gas prices since more people will be driving around for the holidays – De Haan said that is not true.

“Holidays do not influence prices directly. They are generally short in duration and it’s basically, what we see is not an increase in demand, but rather a shift in demand,” he said.

“That is, Canadians do flock to the roads, but once they get to their destination they basically park for a period of several days.”

De Haan explained it is hard to detect small increases in daily demand for gas. He said what is more important is a long, sustained period of increased demand, such as the summer driving season.

He noted that seeing gas prices increase at this time of year is untraditional.

“Normally, we see gas prices declining into the fall and winter because of a reduction in demand,” De Haan said.

“But globally, because of COVID and continued economic recovery, we’re seeing, not only in Canada and the U.S. but globally as well, the trend for oil consumption is one that consumption will likely continue to pick up as the globe continues to rebound from the effects of COVID-19.”

When asked how long Winnipeggers can expect to see these high gas prices, De Haan predicted that they will continue to increase slightly over time.

“I don’t think this is going to be the end of the increases, though this may be the end of the increases for a period of a week or two,” he said.

“I think down the road, we could see prices pushing to those record levels, so long as there’s no relief from the current energy crunch.”

De Haan encourages anyone who needs to fuel up their car to fill up their vehicle sooner rather than later, before every station increases their prices to near-record levels.

- With files from CTV’s Michelle Gerwing.