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Cheap gas prices will be short-lived



(Photo by Jenn Durfey via Flickr)

Regular gasoline prices fall in all provinces but will not last long.

On Thursday night, gas prices ranged from 89.9 cents per liter in Chatham to 97.9 cents per liter in Windsor, while prices in London and Sarnia landed between these two extremes.

Although gas prices typically decline during the winter months, Dan McTeague, senior petroleum analyst at GasBuddy.com, said this downward trend could be attributed to several different factors.

"Gas prices of around 15-16 cents per liter are cheaper than they were last year," he said. "I would say the big factor driving the decline in crude oil prices is lower and an additional almost five cents per liter now because we no longer pay carbon taxes."

McTeague predicts that this low price will last for now. However, that will change in the spring when the federal government reinstates a five-cent carbon tax, something the provincial government is fighting for.

Gas prices peaked towards the end of the summer but have since seen a downward trend.

"Prices have dropped, although 2018 will still fall as the most expensive year since 2014 – especially in recent months when crude oil fell from $ 77 per barrel in early October to around $ 40, which is what we pay today," McTeague said. "Prices tend to rise again – not immediately but possibly at the end of January."

Even though the price for ordinary gasoline falls, it does not apply to diesel. McTeague said for the first time in about a decade, diesel prices have never dropped below gasoline prices in 2018. He mentioned that new regulations on maritime vessels would play a major role in rising diesel prices.

"The International Maritime Organization will enact new regulations which come into force January 1, 2020, so in one year from now where all ships must use very low sulfur diesel, it creates real wrinkles in diesel supplies and reserves," he said. "This drives diesel prices to rise much higher and they will remain like that for the next few years."

Even though the price of gasoline is different depending on the area, McTeague said the wholesale price is around the same. He said the price difference depends on the retailer and whether they provide retail margins or not.

"The big difference that we see from city to city in southwestern Ontario is whether retailers take 12 cents per liter or they take zero," he said.

Gasoline prices are updated regularly and can be found by clicking here.

With files from Matt Weverink


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