Petroleum analyst Vijay Muralidharan believes the dip is more a blip than the start of a downward trend.
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Metro Vancouver drivers found some relief at the pumps Friday as prices dipped to below $2 per liter at some locations, but that relief may be short-lived.
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On Friday, prices dropped by as much as 15 cents a liter after topping the $2 mark, with regular gas going for a record-setting $2.14 per liter in many Metro Vancouver gas stations on Thursday.
Vijay Muralidharan, a petroleum consultant with Alberta-based Kalibrate, believes the dip is more a blip than the start of a downward trend.
“I’m not convinced that gasoline prices are going to go down,” he said Thursday.
The price drop was due to a 17 per cent plunge in oil prices to US$105 a barrel on Wednesday, down from a high of US$140 last week driven by the war in Ukraine and the US decision to halt oil imports from Russia.
“Everybody had gotten anxious. They thought the world would be against Russia, but that did not happen,” said Muralidharan. “But that could easily change if China and India decide to sanction Russia.”
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Canada also barred oil imports from Russia, a largely symbolic move since Canada last bought oil from the country in 2019.
While the rapid rise in fuel prices was predominantly due to the Russian invasion of Ukraine, demand for gas has been strong even before war broke out, suggesting a post-COVID recovery is underway, said Muralidharan.
And with North America on the cusp of the summer driving season, demand is likely to spike again with more people traveling on road trips and family vacations, he said.
Muralidharan said fuel prices could fluctuate within the $1.85- to $2.15-per-liter range in the next month “simply because everything is up in the air.”
Soaring gas prices have motorists and Canadians pleading with politicians for a break at the pumps.
There have been calls on Ottawa to pause the collection of the carbon tax, which is set to increase to 11 cents per liter on April 1. Alberta, which earns lucrative oil revenues, plans to stop collecting the provincial fuel tax of 13 cents per liter . BC has said it does not plan a similar move.