Enjoy low gas prices now because they’re likely to bounce back up in coming days

by NEWS STAFF — Posted Feb 10, 2016 3:38 pm EST – Last Updated Feb 10, 2016 at 3:51 pm EST

Red handle pumpA gas pump in Toronto. THE CANADIAN PRESS/Boris Spremo

The price for a litre of gas in Toronto has dropped to 85.9 cents, but don’t get too comfortable with these rock-bottom prices.

According to 680 NEWS gas price expert Roger McKnight, prices will likely start going up again as early as Friday because of planned maintenance at a number of American refineries.

“When those plants go down and there is more demand and the prices rise,” he said, noting that maintenance usually occurs twice a year.

But the hike could only be temporary, because prices are directly linked to the price of crude oil, which has set record-low prices over the past few weeks.

“Prices are following the downward trend of oil,” McKnight says. “If oil continues to fall, our prices keep on going down.”

U.S. crude oil has been trading just above $29 a barrel over the past three weeks. The prices are so low because large producers in the Middle East are flooding the market in order to push smaller companies out of business so they can continue to control the oil monopoly.

“It all depends on factors that are out of our control,” McKnight says.

Canadian gas prices are in line with those in the U.S., despite popular contention otherwise, because of the devalued Canadian dollar. Converting our current price to American dollars works out to about 50 cents US a litre, or $2 US a gallon.

“Prices in Canada really aren’t made in Canada, they’re set in the U.S.,” McKnight says. Tack on federal and provincial taxes, and the price at the pump is comparable.

And as for the reason gas costs more in downtown Toronto than in suburbs like Mississauga, Brampton or Burlington, McKnight says higher taxes, real estate costs and less competition from independent retailers is to blame.

“I like to say if you can afford to live in Toronto, you can afford to pay 10 cents more a litre,” McKnight says.