Why gas is more expensive even though the price of oil has remained steady
A recent spike in gas prices has Winnipeggers feeling pain at the pumps but the latest jump comes despite the price of oil remaining relatively steady.
That has many wondering why they’re paying more.
Experts said it’s due to refinery outages and some expect the price hike won’t last very long but that’s little comfort for people and businesses who’ve been dealing with volatility at the pumps.
With the price hovering around $1.85 per litre, up around $0.15 since last week, drivers filling up their tanks are feeling sticker shock.
“Well, like everybody else a little upset but we have to do what we have to do,” said Pete Coss, after filling up his van. “We gotta get to work, we gotta get home, we gotta go pick up stuff so we deal with it, I guess.”
Except this time around, experts said fluctuations in the price of oil can’t be blamed, with the cost hovering around the US$80 per barrel mark.
Werner Antweiler, a professor at the University of British Columbia’s Sauder School of Business, told CTV News Winnipeg this spike is due to refinery outages — some scheduled, others due to technical problems.
“The good news is that this temporary price spike won’t last very long,” Antweiler said in an email. “Notice that diesel prices have not gone up, because there appears to be still sufficient inventory. We can expect prices to ease in the next two to three weeks.”
It’s not just Winnipeg, prices have surged across the country, according to the Canadian Automobile Association (CAA).
In B.C., prices rose to $2.35 per litre in Vancouver, while Toronto is seeing gas go for an average of $1.52 per litre.
“There’s a lot that goes into the price of gas,” said Teresa Di Felice, assistant vice president of government and community relations at CAA. “Crude oil doesn’t always translate into the issues of what we’re actually experiencing at the pump.”
Winnipeggers were paying around $1.69 last week. This latest spike has hit hard, especially for businesses in the transport sector.
“Our customers depend on us for reliable, consistent and affordable pricing and so we’ve actually been consuming a lot of the fuel costs ourselves in order to continue to provide that service they’ve come to depend on,” said Evan Martin, vice president of Calculated Moving.
He said their fuel prices have nearly doubled since early in the pandemic when the cost of gas dropped amid decreased demand. It accounts for about 50 per cent of the company’s overall costs. It’s now impacting the business’s ability to grow and electrify their fleet of trucks.
“Previously that wasn’t really something that was on our radar but now that we’ve seen how much fuel can actually play an impact in our day-to-day costs that’s definitely something that we’ve come to consider going forward as the technology continues to evolve,” Martin said.
He’s also noticing customers changing the way they live due to swings in fuel prices.
“We’ve seen people actually end up moving closer to the core areas to rely more on different transit methods: biking, walking, rapid transit, stuff like that,” Martin said. “We’ve actually seen a lot of our customers locating to a place where they’re moving away from independent fuel use.”
Martin said the price of gas is also affecting employees. He said the company’s trying to be more flexible by arranging to pick up some workers from home instead of having them drive out to their compound just west of Winnipeg to start work.
Coss said for him it’s just a matter of being more efficient with his trips when he does choose to drive.
“You start figuring everything out and taking time and making sure everything is done on a routine so you’re not backtracking too much,” he said.
CTVNews.ca Top Stories
Doctors ask Liberal government to reconsider capital gains tax change
The Canadian Medical Association is asking the federal government to reconsider its proposed changes to capital gains taxation, arguing it will affect doctors' retirement savings.
Keeping these exotic pets is 'cruel' and 'dangerous,' Canadian animal advocates say
Canadian pet owners are finding companionship beyond dogs and cats. Tigers, alligators, scorpions and tarantulas are among some of the exotic pets they are keeping in private homes, which pose risks to public safety and animal welfare, advocates say.
WATCH LIVE Toronto police to release updated list of most wanted fugitives in Canada
Toronto police and law enforcement partners will be releasing the BOLO program’s updated list of the top 25 most wanted fugitives in Canada at a news conference on Tuesday morning.
Prince William and wife Kate thank public for birthday messages for son Louis
Prince William and his wife Kate thanked the public for their messages which had been sent to mark the sixth birthday of their youngest son Louis on Tuesday.
She was the closest she'd ever been to meeting her biological father. Then life dealt her a blow
Anne Marie Cavner was the closest she'd ever been to meeting her biological father, but then life dealt her a blow. From an unexpected loss to a host of new relationships, a DNA test changed her life, and she doesn't regret a thing.
How quietly promised law changes in the 2024 federal budget could impact your day-to-day life
The 2024 federal budget released last week includes numerous big spending promises that have garnered headlines. But, tucked into the 416-page document are also series of smaller items, such as promising to amend the law regarding infant formula and to force banks to label government rebates, that you may have missed.
Fire engulfs old Edmonton municipal airport hangar
A historical hangar at the former Edmonton municipal airport beside the NAIT main campus was on fire Monday night.
RCMP uncovers plot to sell drones and equipment to Libya
The RCMP says it has uncovered a ploy to sell Chinese drones and military equipment to Libya illegally.
Which foods have the most plastics? You may be surprised
'How much plastic will you have for dinner, sir? And you, ma'am?' While that may seem like a line from a satirical skit on Saturday Night Live, research is showing it's much too close to reality.