Gas prices on the rise

Business & Tech Headlines

Written by Sarah Horwath & Alex Zakrzewski

Thursday, 01 March 2012 12:23

Oil reached a nine-month high this week closing at more than $106 USD a barrel on Tuesday and consumers across North America are feeling the ramifications at the pump.

Gas prices jumped 14 cents per litre in Montreal on Tuesday and reached $4 a gallon in many places on the US West Coast, Hawaii and Alaska.

All information courtesy www.gasbuddy.com

Average prices in Canada currently hover around 128 cents per litre – a ten cent increase from this time last year – while US prices have risen roughly 14 per cent so far in 2012.

Gregg Laskoski, senior petroleum analysts for Gasbuddy.com, a price tracking website, told thedailyplanet.com that prices across North America annually increase going into the spring and summer months.

This year, economic uncertainty abroad and refinery problems in the U.S. have driven prices up higher than expected.

“What’s really exacerbating the situation this year is the global uncertainty that exists in the Middle East, specifically the problems between the Iran and Israel,” said Laskoski.

“We don’t know if there’s going to be a war between those two countries and just the possibility is pushing crude oil prices higher.”

Last week’s fire at a BP refinery near Blaine, Washington – a major supplier of jet fuel and gasoline from San Diego to Vancouver – saw prices spike all along the West Coast.

The planned closure of three Pennsylvania refineries has further compounded problems, said Laskoski.

All information courtesy www.gasbuddy.com

“Collectively, those three refineries represent more than 700,000 barrels per day of refinery capacity,” he said.

“Obviously anytime you remove capacity on that scale, that’s a void that still has to be filled. The process in which that void is filled is obviously going to add to the cost of the product delivered to the consumer.”

Laskoski told thedailyplanet.com that consumers can expect prices to continue to climb incrementally between now and May unless there is a discernable resolution to the tensions in the Middle East.

“That could be the lynchpin that really calms the financial markets,” he said. “If that happens, then we could see prices come down sooner rather than later.”