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Gasoline breaks through $1 level

The Canadian Press

Calgary — The average price of gasoline across Canada has risen above $1 per litre for the first time in seven months.

The last time prices surpassed that threshold was the week of Oct. 21, according to data compiled by Calgary consultant firm MJ Ervin & Associates.

Jason Toews of the price-tracking web site http://gasbuddy.com/ says the average pump price across Canada hit $1 over the weekend.

Charts on the web site show the pump price rising sharply from around 90 cents per litre since the beginning of May.

“Demand for gasoline goes up during this time of year and so that's the primary push here with gas prices going up over the $1 per litre mark,” he said.

“When the weather's cold in the winter and the days are short, we just generally don't like to drive as much. There's not as much demand for gasoline in winter.”

Mr. Toews is expecting national average gas prices to bounce around the $1.10 to $1.15 per litre range for much of the summer.

“I don't think we're going to see anything like we saw last summer because of the recession,” Mr. Toews said.

The average price of gas across Canada hit an eye-popping $1.40 per litre last summer, which makes the current price seem almost like a bargain, Mr. Toews added.

“We no longer see $1 per litre as being expensive any more. We saw $1.40 and the $1.50 across Canada last summer and our perspective has changed.”

Last year's pump price runup was largely tied to a spectacular increase in the cost of gasoline's main ingredient, crude oil.

At this time last year, a barrel of crude was worth $130 (U.S.) on world markets. That figure was less than half on Monday, falling to around $61 barrel in electronic trading on the New York Mercantile Exchange as investors eyed an OPEC meeting this week and weighed evidence of a global economic recovery.

OPEC leaders this year have said they want the price of crude at $70 a barrel, and most analysts say the recent jump to above $61 from below $35 in March will keep the group from any further production cuts to prop up the price.

Oil has rallied on investor optimism that the worst of the global economic downturn is over and demand for crude may start to pick up.

Crude is one of many factors affecting the final pump price. The cost of refining crude into gasoline, taxes and the level of competition in individual markets are also key.

While the average price for gas all of Canada is $1 (Canadian) per litre, there is a great deal of variation between regions.

In British Columbia, a provincial tax on fuel means higher pump prices. For example, in Vancouver on Monday, motorists were paying more than $1.05 per litre. A week ago a litre of gas in Vancouver went for about $1.03 per litre.

In Newfoundland, where pump prices tend to be higher than in more populous provinces, stations are selling gas for $1.07 per litre.

In Toronto, a very competitive market, gasoline was 96 cents per litre and in Calgary it was just under 97 cents per litre.

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