Ripple effects of the conflict in Ukraine have reached Edmontonians.
Gas prices crossed the $1.50-per-liter threshold at some stations in Edmonton Thursday morning.
“This crisis has not affected supply of gasoline at all, but as the rest of the world sees really volatile crude prices, it’s going to get passed through consumers,” Richard Masson, the chair of the World Petroleum Council Canada, explained.
“It’s really just a question about how quickly does that happen and how quickly do different retail outlets try to get that price increase in anticipation of their feedstock costs going up.”
International oil prices have increased 20 per cent in the last five days, by Masson’s count.
The uncertainty of the situation in Ukraine means it’s difficult to tell how much the prices at pumps will go up.
“As this conflict continues to escalate and gets more violent, more and more countries and companies are saying they don’t want to buy Russian crude. And Russia supplies 11 per cent of the world’s oil,” Masson said.
“So if we’re not going to buy that crude, there’s nothing really to replace it. And that’s going to mean higher prices until we adjust overall global demand or pull more out of storage or cope with it in other ways.”
The highest gas price in Edmonton early Thursday morning was $1,559 per liter, according to Gas Buddy.
Alberta’s capital isn’t the only city to have seen prices jump; on Wednesday, metro Vancouver pumps reached were selling liters for $1,869. In Toronto, prices had risen to an average of $1.60 per liter and were expected to rise eventually as high as $1.74 per liter.
“I would expect that they will all level out, though they may not have reached their final upside level yet,” Masson echoed.
in response, Canada’s industry minister has asked the Competition Bureau to monitor fuel prices and spoken to some companies about boosting domestic production to counteract any possible shortages.
Typically, Masson noted, Canada’s dollar rises when crude prices do, insulating the public some.
Extra pressure is coming from the Bank of Canada’s decision to raise the key interest rate to 0.5 per cent in a bid to help fight inflation.
“With interest rates going up at the same time as the cost of things like groceries and gas, that certainly puts pressure on individual households,” Kyle Murray, dean of the University of Alberta School of Campus, told CTV News Edmonton.
“Some people will feel it more than others, depending on if you have to renew your mortgage right now, if you have to drive a lot – those sorts of factors. It’s going to be difficult.”
But, he doesn’t see it staying difficult in the long-term.
“That’s definitely good for the economy. It’s definitely good for Alberta in terms of taxes and royalties and more jobs,” Murray noted.
“But for those of us who are working the same job for the same pay and just costs are going up, it might not feel like it on an individual level.”