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08/11/2021

Gas prices will depend on Delta variant's effect on economy: analyst

gas price analyst says prices at the pump will largely depend on how the Delta variant of COVID-19 plays out in the North American economy.

Dan McTeague, president of Canadians for Affordable Energy, says the variant has caused concern around demand as it slows down the economic reopening.

The price of crude oil peaked this year in early July, when it went above US$75 per barrel and sent gas prices in cities like Vancouver to highs of $1.74 per litre.

The price of crude oil was US$68.63 per barrel Tuesday afternoon, but the price Canadians pay at the pump has consistently risen in recent weeks.

McTeague says that's because the value of the Canadian dollar also dropped when the price of crude dropped.

Looking ahead, McTeague says Canadians can base their expectations on fuel costs around whether COVID-19 cases plateau or not.

The average price of gas in Canada currently sits around the $1.39 per litre mark, according to data from Gasbuddy.com.

If cases continue to rise, McTeague said people can expect prices to hover at that current level. But when cases drop, he expects more sharp increases.

"There continues to be this reality that the world is playing catch up when it comes to demand, and supply is just not adequately meeting demand,'' said McTeague.

"It'll obviously be a very real problem once we get past this particular COVID variant.''