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Southwestern Ontario 'the wild west' in terms of gas price fluctuation, says analyst

Gas prices in Windsor tend to increase on Fridays and fall immediately during the weekend, according to senior petroleum analyst Dan McTeague of Gasbuddy.com.

But in markets like Chatham, St. Thomas and London, prices dip in the afternoons and evenings before increasing in the morning.

"My son lives in London. He always recommends to me that when he goes out and buys gasoline for his little Ford Escape, it tends to be around eight or nine o'clock at night," said McTeague, adding that's when retailers there tend to shed their prices by as much as nine cents a litre.

He said the time- and day-based fluctuations set the region apart as "the wild west."

"You don't see that in many other places across Ontario."

The price of a litre of regular, unleaded fuel is hovering around a dollar in Windsor Thursday at noon.

Many gas retailers across the country are charging less than one dollar a litre for gas as part of "deep discounting," according to McTeague, adding it's the result of crude oil prices dropping more than $20 a barrel in a month.

'Devastating impact' in the long-term

He said much of the drop has to do with a "reversal in the psychology of traders," who thought there would be a tight supply of crude oil.

"Apparently, with the U.S. changing its mind on complete sanctions in Iran and their oil, it means people are producing a lot more oil than expected ... There's plenty of oil out there," said McTeague.

While the drop may be beneficial for consumers in the short-term, McTeague said it has a "devastating impact" on Canadian currency against the U.S. dollar.

CBC
CBC

"It does make the cost of living substantially higher in Canada while, at the same time, forcing governments to seek higher taxes elsewhere to compensate for the loss," he said.

And while he said it's hard to say how long gas prices will stay this low but he wouldn't be surprised to see prices continue to fall "well under a dollar" at a number of big box stores as early as Friday afternoon.

He said the "magic number" is 97 cents a litre for gas stations to break even, but big box stores will subsidize their losses with the sale of other products.