Gas analyst says prices in Alberta, Canada, not expected to drop anytime soon
That message from head of petroleum development at GasBuddy Patrick DeHaan comes as the average gas price in Alberta now sits around 1.61 cents per litre, the cheapest price in Canada, according to GasBuddy data.
The average price in Canada according to the same data is at 172.9/per litre mark.
This drop comes well after prices in Alberta were hovering around the 180.9/per litre range, with the price at the pump for regular fuel seen in St. Albert at 187.9/per litre just a few weeks ago.
Much of why prices at the pump aren't falling as fast as hoped has to do with the ongoing war in Iran.
"A lot of the drop has come in the last couple of weeks as oil prices have moderated in hopes there would be an agreement between the U.S. and Iran to reopen up the Strait (of Hormuz)," said DeHaan. "So far, that hasn't happened and as a result, oil prices are going back up."
The U.S. House of Representatives recently voted against the war by a 215-208 margin, though it remains to be seen what the next steps will be. Since the war launched by President Donald Trump on Iran, prices at the pump have spiked globally, including here in Canada.
Rumours of a deal have come up multiple times, with Trump and members of his government proclaiming on multiple occasions an agreement was close. To date, no such agreement has been reached.
The longer the war goes on, the longer DeHaan says you'll see prices continue to fluctuate.
"So long as the strait is closed, I do expect that there will be movements in the price of oil," said DeHaan. "In fact, by mid-summer after the U.S. strategic reserve releases are behind us, we could see oil prices really accelerating as global oil inventories remain really tight."
DeHaan says there's about 20 million barrels of oil blocked by the shutdown in the Strait of Hormuz, a critical pathway for global shipping route for global energy shipments.
During the COVID-19 pandemic, Saudi Arabia initiated a price war with Russia, which led to prices of West Texas Intermediate and other energy sources going into freefall.
That affected prices at the pumps, with some stations in Edmonton selling regular gas at just over 50 cents a litre with one station seen near the Legislature grounds selling gas at 49.9 cents a litre.
In Calgary, some stations saw prices dip below 80 cents a litre in early March, leading people to take advantage of the inexpensive fuel costs.
While that event, and in turn, low prices, provided significant relief at the pumps, DeHaan says something like that is virtually impossible to happen now for several reasons.
"Ukraine has been taking out Russia's ability to export oil, and Russian oil remains heavily sanctioned in light of their continued war in Ukraine," said DeHaan. "That's not even an option in my book."
For it's part, the Alberta government is in the middle of reviewing the data for a potential lift in the gas prices for July 1, in keeping with the Fuel Tax Act, which passed under the Klein Progressive Conservative government.
A statement from Marisa Breeze in the Ministry of Finance says if the price of oil is over $90 a barrel for a quarter, the 13 cents a litre tax will be lifted for a quarter. Should prices stay under $80 a barrel, the fuel tax will remain in place.
