An industry expert says he doesn't believe gas prices will come down any time soon, as the maximum price of regular gas increased again in Newfoundland and Labrador on Thursday by 2.2 cents per litre, marking another record high for the province.
Patrick De Haan is the head of petroleum analysis for GasBuddy, a gas price tracker that operates apps and websites based on finding real-time fuel prices in the United States, Canada and Australia.
"We continue to live in this COVID era where there are various bottlenecks, various challenges and various imbalances that arise," De Haan told CBC News from his office in Chicago.
"Some of the newest factors now were completely unexpected several months ago. We have a looming energy crunch developing overseas where China is looking at a quite low amount of coal to feed their power plants, there's a natural gas shortage in Europe and all of that is supporting the price of oil simply because crude oil can be used as a backup to generate electricity or it can be used to heat homes."
De Haan said the price of crude oil continues to rise based on global demand and because the energy crunch is "likely to continue to accelerate" with oil production lagging behind.
Gas prices are rising everywhere in Canada, not just in Newfoundland and Labrador, De Haan said. The average price in Canada is $1.45 a litre.
In Newfoundland, the maximum price of gas is now more than $1.60 a litre across the island on Thursday as part of the the Public Utilities Board weekly price-setting — $1.612 on the Avalon Peninsula, $1.638 in central, $1.62 in the Corner Brook area and $1.63 to $1.65 in parts of the Northern Peninsula.
In Labrador, the maximum price is $1.70 in Churchill Falls, $1.678 in western Labrador, $1.508 in central Labrador and $1.673 on the south coast.
All other fuel types are on the rise as well.
Diesel increased by up to 2.4 cents per litre, furnace oil by 1.95 cents per litre, stove oil by 2.22 cents per litre and propane heating by three cents per litre.
Furnace oil is now $1.05 on the northeast Avalon, $1.08 on the northwest Avalon, $1.09 in central Newfoundland, $1.06 in the Corner Brook area and $1.11 for parts of the Northern Peninsula from Englee to St. Anthony.
A continued rise
While gasoline prices are on the rise across Canada, the same thing isn't happening stateside. De Haan said that's due to the current value of the Canadian dollar.
"The U.S., worth noting, is not at record highs for gasoline or diesel while Canada is. A lot of the difference there can be chalked up to the fact that the Canadian currency is much weaker than it has been in decades past when there was parity between the U.S. and Canadian dollar," he said.
"Now the Canadian dollar is much weaker and that's partially to blame for why Canada's gas prices are much higher, because oil is globally traded in U.S. dollars. Currency can play a significant role in driving up prices."
If the Canadian dollar were close to parity with the U.S. dollar, De Haan said, Canada's average prices would be as much as 20 cents a litre lower than they are today.
Shipping problems and consumer consumption habits have also helped to push prices as high as they are, said De Haan. If the Organization of the Petroleum Exporting Countries increased oil production, he added, "it could alleviate the situation significantly."
But with the energy crisis still looming, he said, he doesn't think there will be a significant downturn in prices for several months — and maybe not even then.
"By the time that some of these issues could be resolved, we could be on the cusp of a driving season next year in which prices go up," he said. "So I don't necessarily see a decline in prices, but I do see a risk to the upside, that is prices are likely to rise further or stabilize rather than decline."
The following chart shows how gas prices have changed recently at Newfoundland and Labrador retailers, as reported by users of the GasBuddy.com website.