Gas prices expected to soar, thanks to Libyan turmoil
Posted Feb 24, 2011 05:30:17 AM.
This article is more than 5 years old.
Nova Scotia’s regulated gas prices are expected to take a significant jump this week as chaos in the Middle East continues to disrupt the marketplace.
News 95.7 is predicting an increase of up to four cents a litre this week, which would put the price of regular self-serve as high as $1.22 in metro.
The increases are being blamed on turmoil in Libya where many petroleum companies have ceased operations as citizens try to over throw the government.
Liberal MP Dan McTeague is a gas price watcher and says the price increases, which have already taken effect in unregulated markets, are a little premature.
“This is a bit of an overreaction to a very serious situation that has the potential to create threats,” said McTeague. “But considering it takes three and a half months to get crude all the way to our tanks, one would have thought a little bit more pause before we react.”
McTeague says it’s not oil but the cost of wholesale gasoline pushing up the price.
“The real number there is the Nymex Gasoline Future which jumped as much as 13 cents a gallon, or roughly translated, about three, three-and-a-half cents a litre, which of course is being reflected instantaneously at the pumps,” he said.
Oil closed on a two-and-a-half year high at $98.10 a barrel on the Toronto Stock Exchange Wednesday, and it’s predicted the price could reach $100 or $220 a barrel.
George Murphy with Consumers for Fair Gas Prices says the conservative estimate on gasoline prices for motorists in the near future is $1.40 a litre. He says how quickly that price is achieved depends on what happens in the Middle East.
“If the protests spread to other key OPEC countries, I guess the sky’s going to be the limit on this, provided that the Canadian Dollar stays high, we could see upwards of $1.40 here,” Murphy told the Rick Howe Show. “If we’re talking about protests that are going to spreading to Iran, we’re talking about shutting in four million barrels of a day of production. That’s basically five per cent of the world’s daily usage.”
Toronto, Hamilton, London, Kitchener, Ottawa, Montreal and other centres across Canada have witnessed gas price increases of 3.6 a litre. Regular self-serve now sells for $1.30 a litre in Montreal and 121.4 cents a litre in Toronto.
There was a significant jump in wholesale prices Wednesday on top of smaller increases in the last week.
New Brunswick’s regulated prices went up Wednesday night by a penny and a half, but that price was set Tuesday, before wholesale prices took a significant increase this week.
