Canadians should experience the fastest drop in gasoline prices in nearly 13 years on Sunday, as fears about a virulent new variant of COVID-19 are expected to provide an 11-cent-per-liter break at the pumps.
Dan McTeague, president of Canadian for Affordable Energy, said the national average price could drop to around $ 1.32 per liter, but would start rising again midweek.
“(Sunday) represents the largest decrease in bombs that we have seen since 2009,” he said in an interview.
Global crude oil prices plummeted on Friday on fears over a new variant of COVID-19 called Omicron that led Canada to bar entry to foreigners traveling through southern Africa.
The January crude oil contract fell 13.1 percent or $ 10.24 on Friday and currently stands at $ 68.15 a barrel.
The decline came as US stock markets closed early Friday for the Thanksgiving holiday.
“Sunday and Monday will be the best days for Canadians to fill up, including British Columbia,” McTeague said.
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Even flood-ravaged British Columbia residents will save on the province’s high gasoline prices despite facing rationing as severe flooding has shut down both the Trans Mountain pipeline and the province’s only refinery.
Non-essential vehicle drivers can only purchase up to 30 liters per visit to a gas station in the Lower Mainland, Sunshine Coast, Sea to Sky area, Gulf Islands and Vancouver Island.
East Coast residents will not reap the immediate benefits of Sunday’s price drop because its regulated regional system averages price movements. That provides price predictability but reduces price discounts.
Canadians will see the biggest drop in gasoline prices since 2009 due to COVID variant fears. # Covid19 # Omicron
Despite the upcoming decline, domestic gasoline prices have risen nearly 43 percent last year as the reopening of the world economy from pandemic lockdowns triggered a recovery in crude prices.
McTeague suggested that Canadians shouldn’t be too comfortable with saving energy. He said prices are expected to rise as OPEC and its allies, who will meet on Monday, will likely refuse to increase production further. Energy traders realize that Friday’s drop was exaggerated and “goes against fundamentals,” he added.
“My feeling is that the declines that we saw were a bit exaggerated and overbought, and for that reason I think we could see a little more balance in markets and fundamentals by Wednesday,” McTeague said.
“Unless there is more disturbing news of increasing lockdowns, I would expect oil prices to likely rebound between $ 3-4 a barrel on Monday or Tuesday, which means that by Wednesday or Thursday we could be seeing Increases in the order of four or five cents a liter. “
McTeague said some gasoline savings will continue for a couple of weeks, but he expects crude to rise again to about $ 90 a barrel, which would translate into Canadian prices above $ 1.50 a liter.
Looming carbon tax increases will further boost prices.
A tax of 2.5 cents per liter, including HST, will take effect on April 1, 2022. It will be followed in December by the transparent fuel standard adding another 18.1 cents per liter, including HST, McTeague said.
Adding to the inflationary pressure is the Canadian dollar, which is less valuable than when it was on par the last time crude prices hovered around US $ 80. That reduces the purchasing power of all kinds of products, including energy and food.
The Canadian Automobile Association said that as of early Saturday, Manitoba had the lowest average pump price of $ 1.35 / L, closely followed by Alberta at $ 1,377, while Newfoundland and Labrador were the highest at $ 1,583 with British Columbia at $ 1,558.
This Canadian Press report was first published on November 27, 2021.
Reference-www.nationalobserver.com