Canadian Gas Prices Surge Amid Ongoing Conflict in Iran

Gas prices across Canada are experiencing a notable increase, rising by nine cents per litre since Saturday, following the escalation of military actions in Iran. As the conflict enters its fifth day, energy expert Dan McTeague, a former Liberal MP and president of Canadians for Affordable Energy, has predicted further hikes in prices this week.

In a social media update, McTeague warned that gasoline could spike another three cents per litre by Thursday. Diesel prices are expected to rise even more, increasing by as much as 11 cents per litre. This surge is attributed to the ongoing conflict, which is influencing global oil prices. On Wednesday morning, the average cost of gasoline in Toronto was approximately $1.42 per litre, slightly above the national average of $1.38, as reported by the Canadian Automobile Association. The highest recorded price was $1.71 in Vancouver, while Peterborough, Ontario, saw the lowest at $1.26.

McTeague noted that world oil prices had already begun escalating in anticipation of potential military actions against Iran. “There had been a war premium already factored into trades going back a couple of weeks in February,” he stated, suggesting that the current price response, while significant, is somewhat restrained.

The implications of rising fuel prices extend beyond the gas pump. McTeague cautioned that if the conflict continues, Canadians could face increased costs for a range of goods. This is due to the reliance on diesel and gasoline for manufacturing and transportation across the country.

“There’s a whole pile of uses for energy, and if the price goes up, then it has to be borne by someone else,” McTeague explained. “Ultimately, it’s a customer holding the bag, and for the fight against inflation? Well, it’s just taken a severe hit.”

The Canadian dollar has been steadily declining against the U.S. dollar over the past five years, currently sitting at about 73 cents. This depreciation further complicates the situation, as commodities, including fuel, are priced in U.S. dollars. “We price all of our commodities in U.S. dollars whether they’re made here or not,” McTeague reiterated.

The transition from winter to summer gasoline often leads to price increases, typically around eight cents per litre. With warmer weather encouraging more travel, demand for fuel may increase, compounding the impact on prices. For operators of long-haul transport trucks, the cost of filling a thousand-litre diesel tank could escalate by $60 with rising prices, leading to potential fuel surcharges for various industries.

McTeague mentioned that these surcharges would not materialize instantly but could become a reality if the upward trend in fuel prices continues for several weeks. He noted, “If this goes on for another week, you will be getting everyone who uses diesel fuel, from aviation companies to transport companies to deliveries, now adding in a fuel surcharge.”

The effects of rising fuel prices are likely to ripple throughout the economy, affecting sectors beyond transportation, including manufacturing and mining. McTeague emphasized the interconnectedness of energy costs and overall economic stability, warning that consumers may soon feel the financial strain.

Reflecting on previous conflicts in the Middle East, he expressed concern about the duration of the current situation. “Putting on my old cap,” he remarked, “these things don’t go away quickly. Last time we got involved in the Middle East, it was more protracted and prolonged.”

While he refrained from predicting specific future prices, McTeague acknowledged the inherent uncertainty in the current environment. He remarked, “No one really knows” how the situation will evolve, highlighting the volatility of fuel markets in response to geopolitical tensions.

As the situation develops, Canadians will be closely monitoring fuel prices, which are expected to remain under pressure in the coming days. For the latest updates on this story and more, readers are encouraged to stay informed through reliable news sources.