“The only thing certain in life is death and taxes.” Well, these days rising gas prices also seem to be pretty certain. Hitting us well before the typical “summer boom” gas prices are through the roof, with no end in sight. While most Canadians have gotten used to triple digit gas prices, I have yet to meet anyone that is happy with it.
With gas prices above $1.30/litre, many in the GTA are looking for an explanation. Whether we blame conflict in the Middle East or simply the greed of a select few companies pushing prices the reality of the price hikes is forcing Canadians to rethink travel plants, automobile purchases and lengthy commutes.
The United States plays a large role in the recent increases not only because many of the players are U.S-based companies, but also because of the close ties that Canada has with them in trade and tourism. The U.S supply of gas is below its 5-year average, according to Michael Ervin, a petroleum industry consultant. This causes the wholesale price of gas to rise as wholesalers attempt to secure their inventory. Subsequently, this forces Canadian prices to rise because otherwise American wholesalers will race to buy Canadian gas and sell it in the States.
Dan McTeague, a former MP, started a website, tomorrowsgaspricestoday.com, to help answer why gas prices are rising. His website tracks the price of gas in 13 Canadian cities but it also has a chart that compares the wholesale price of gas in those same cities to the wholesale price of gas on the New York Mercantile Exchange. As you can probably guess, the wholesale on the NYMEX is lower. Alternative options to save money on gas (beside the obvious: walk, bike, etc.) is a new website www.gasbuddy.com, that allows users to search for the cheapest gas prices in the area.
With alternative fuel energy still a ways off, it will be very interesting to see how the market responds to these new industry conditions.