Record fuel prices, but Canadians still buying

May 04, 2018

By Marc Montgomery

Across the country prices range from a low of around $1.30 per litre to highs of around $1.60 and higher, which are record prices in most provinces.

The prices have skyrocketed as much as 20 cents per litre in the last three months,

Usually high prices would cause people to reduce usage, but that doesn’t seem to have happened at all.  Quoted by the CBC, the CEO said their sales volume has increased and as for a reduction in sales, “We’re not seeing it. We’re not seeing it at the moment”.

Higher prices and/or additional taxes have usually seen a brief reduction before people begin to resume regular driving habits.

Also more people in Canada are moving away from sedans and small cars to trucks and sport utility vehicles (SUV). Vehicle sales in Canada hit a record in 2017, but passenger car sales hit their lowest in decades.

Indeed the huge Ford Motor Co. announced it will be phasing out its sedan lines, leaving only the Mustang and the Focus Active.

The reasons for the fuel price rise are the typical ones, including the oft repeated “increase in demand of summer driving”. Other reasons include a lower value of the Canadian dollar against the U.S. dollar, crude oil prices are rising, and maintenance of refineries creating temporary shortages.  Although Canada is a major producer of crude, most of that gets sent to the U.S and we buy refined products in return.

Some provinces like B.C. have tacked on additional costs at the pump in the form of new carbon taxes.

Analysts expect that prices in Canada may go even higher during the summer.