Russian invasion contributing to record high gas prices in Winnipeg

Price jumps at the pumps are shocking some Winnipeggers who were fuelling up their vehicles on Thursday.

“Why is this happening? And when will it go down?” said Mehdi Abbas, a student who recently purchased a new car.

Gas prices in Winnipeg already reached a record-setting price of 159.9 cents per litre of gas on Wednesday. Mere hours later, Manitobans woke up to gas prices of 163.9 on Thursday.

Given the rapid hike in price, Abbas is slightly regretting buying his new vehicle.

“I have a smaller car but people with families? I can’t even imagine, with a bigger car that takes up more gas, I can’t even imagine how it must be for them,” he said.

Oil and gas prices have been steadily rising in recent weeks, says Roger McKnight, chief petroleum analyst at En-Pro International.

Global supplies of crude oil have been limited and demand for gasoline and jet fuel started creeping up as pandemic restrictions were loosened around the world.

“We have very low inventory, very high demand and very little in the way of relief from refineries,” which are preparing for annual maintenance in preparation of the summer driving season, he said.

Then Russia invaded Ukraine.

“The Russia conflict is sort of the straw that broke the camel’s back,” said McKnight.

Russia accounts for about ten per cent of the global demand for oil, says Dan McTeague, president of Canadians for Affordable Energy.

“That’s a little over ten million barrels a day,” he said.

If the conflict continues, McTeague expects gas prices to only keep rising.

“Look for an additional net increase of fifteen cents per litre… over the next four to six weeks, if not sooner,” he said.

Rising gas prices don’t only affect drivers. Oil still powers most of the world’s economic sectors, so an uptick in energy prices means producing all manner of consumer items becomes more expensive.

That includes fresh fruits and vegetables.

“Fuel is one of the input costs that we utilize for the process of seeding our crops and feeding our livestock,” said Bill Campbell, president of Keystone Agricultural Producers of Manitoba.

Rising energy costs will “increase the cost to the producers,” Campbell said. “The consumer needs to be aware that, with these increased costs, there’s a good chance that they will be passed on.”

Higher fuel prices also means a larger cost for shipping products into and out of the province.

That’s a concern for the Manitoba Chambers of Commerce, especially after two economically tumultuous years for small and local businesses.

President and CEO Chuck Davidson is hoping businesses will rely on local products to reduce costs, and that consumers will do much the same.

“It reduces your cost pressures,” said Davidson, “Anything that businesses can do to support local producers and make sure that some of their goods are not going to have to travel as far is a good thing.”

“Anything that Manitobans can do to support those businesses will also be good in the long run.”

In the meantime, facing higher-than-ever gas prices, Abbas is going to save money, however, he can.

“I might just go in the way of Winnipeg Transit,” Abbas said, “Because with these insanely high prices I don’t think I’ll be able to afford keeping a car for long."