Ontario gas prices headed for major spike in wake of Harvey

Ontario gas prices headed for major spike in wake of Harvey

According to gasbuddy.com, the average retail price of gasoline in Ontario has risen from 107.5 cents per litre on August 28 to 120.9 cents per litre on September 1.

Dan McTeague, senior petroleum analyst with the price-comparing website GasBuddy.com, says it's a matter of when, not if.

Prices are expected to remain high until refineries on the U.S. Gulf Coast return to normal operation, the timing of which will remain unknown until floodwaters recede and damage is assessed, they say.

"Gas prices are up in Winnipeg; on Friday, this North End station was at 107.9 cents a litre". Analysts expect a hike of around 5 cents by Friday evening, followed by a further jump of 9 cents on Saturday. "And with that they'll be able to feed product into the Colonial Pipeline and restore inventories in the northeastern USA", said Michael Ervin, senior vice-president with Kent Group Ltd.

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It said outbound pipelines, including the 2.6 million bpd Colonial system to NY, are unable to source product from Houston, leading to surging fuel prices throughout the United States.

That, in turn, would reduce supplies and drive up prices in Western Canada. Now there is no indication the refineries have been damaged by the hurricane or resulting flooding. About one-quarter of total refining capacity in the U.S.is offline.

"But right now we're not seeing that", he said. That translates to about 75 cents USA per gallon, he said, adding typical U.S. increases in affected states have been only about 20 cents per gallon. "And simply because buyers in the States would be looking to Canada for supply, we're seeing higher wholesale prices in Eastern Canada as well", Ervin said. As of Friday, most pumps sat around 110 cents a litre for regular fuel in the Queen City.

McKnight said he thinks gasoline prices will drop back by two or three cents per litre next week throughout Canada.

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