Gas prices skyrocket but should come back some

By Jeremy Appel on November 4, 2017.

jappel@medicinehatnews.com @MHNJeremyAppel

Gas prices shot up to $1.279/litre in Medicine Hat on Friday, but an industry analyst says consumers will likely feel at least some relief by the close of the weekend.

Prices at the pump increased by 13 cents from Thursday and 23 cents since earlier in the week.

Dan McTeague, senior analyst for Gas Buddy, said the increase is part of a broader trend starting in the U.S. Midwest.

“We’ve seen in the market of the U.S. Midwest gas prices shoot up last week and the week before by some 56 cents, almost 60 cents, a gallon,” McTeague said, adding that this works out to a 15-cent wholesale price increase in Canada.

“Obviously, everyone’s disappointed but it has a lot to do with what happens south of the border, in particular the exploration going through longer maintenance.”

He said wholesale prices will likely decrease as early as Sunday.

Gas prices in Western Canada — from Thunder Bay to the British Columbia coast — are based on the Chicago stock market value, whereas Eastern Canada’s is based on the New York market and the B.C. lower mainland is based on the Pacific Northwest.

“Canadians haven’t been pricemakers in quite some time,” said McTeague. “We just don’t have the refinery capacity.”

He added that because there’s more competition in the U.S., its prices don’t increase as quickly as they do in Canada.

“They certainly don’t go to the great heights that we see here,” McTeague said.

“We’ll usually see them go down within 48 hours of the market making a decision.”

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