‘Embrace high prices now’: Edmonton gas prices top $1.50 per liter, with increases to come

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Gas prices are shooting up in Edmonton, and analysts are warning not to expect any relief from sticker shock at the pumps.

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Edmonton’s fuel prices were sitting at $1.53 per liter on Thursday, according to Natural Resources Canada. In Calgary, they were a bit higher still, at $1.56 per liter.

GasBuddy, a gas price information hub, showed the cheapest fuel you could find in the Edmonton area Thursday was still a painful $1.34 per liter.

It’s a similar story across Canada and beyond, and Vijay Muralidharan, Calgary-based director of consulting at Kalibrate, a company that tracks fuel prices, said drivers can expect even higher bills soon.

“Long story short, embrace high prices now, because it’s coming.”

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He explained there are four major factors that influence gasoline pricing, but the biggest driver since December has been surging crude oil prices. Even before Russia’s invasion of Ukraine, oil refineries were working “flat out” to meet strong market demand.

Attacks on Ukraine that have now been ongoing for a week are triggering further uncertainty in energy markets, and that’s showing up in even bigger gasoline bills.

“That’s the sole driver, period. There’s no other explanation for this,” Muralidharan said.

He added analysts were already shocked by how high North American refinery margins have been this year, unexpectedly driving gas prices up much earlier than the start summer driving season.

That period, when demand for gasoline is typically at its peak, is still ahead, “easily” sending gas prices up by another eight to 10 cents, Muralidharan said.

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Kenney calls on Trudeau to scrap carbon tax

Asked Thursday about the potential for relief for Albertans as gas prices soar, Premier Jason Kenney said he is “concerned,” but the provincial government doesn’t have any immediate plans.

Ultimately, he said, he wants to see the federal government scrap the carbon tax.

“If we were to cut the provincial excise tax on gasoline, (Prime Minister) Justin Trudeau will scoop up that revenue with his tax hike on April 1. So I’ll tell you what: if Justin Trudeau were to agree not to raise the federal gas tax on April 1, then we would look for sure at further relief here in Alberta.”

One question mark around future prices at the pump is the possibility of rising interest rates across the world’s major banks in a bid to contain inflation. The Bank of Canada took that step Thursday, and broad measures could force people to change the way they manage their own household budgets, potentially tamping down demand for a full tank of gas.

But Muralidharan said those impacts won’t show up in the market for a while, and the situation in Ukraine is still the biggest factor in the weeks to come.

“If there are still sanctions on Russia, if there’s still some sort of uncertainty that prevails, then expect much higher gasoline prices.”

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Twitter: @meksmith