Pump prices jump four cents per litre

Gas prices jumped about four cents per litre in Regina on Thursday, posting an average price of 102.7 cents per litre up from 98.6 cents per litre on Wednesday, according to GasBuddy.com.

Some Petro-Canada stations were selling gasoline at 107.9 cents a litre on Thursday afternoon, while most other major stations were selling at 105.9 cents per litre. Many independent stations were selling at 98.9 cents per litre and discounters like Regina Cabs, at 3405 Saskatchewan Dr., were selling gas for as low as 92.9 cents per litre.

Jason Toews, co-founder of GasBuddy.com, said pump prices tend to go in cycles, with retailers testing the market with higher prices, which get forced down by competition. “We saw a similar price hike on May 6. The average went over $1 then it came back down to 98 cents on average.”

Toews added that pump prices seem high at $1 a litre or more, but they’re still significantly lower than they were a year ago, when prices were 127.6 cents a litre. “Last June, it was over $1.30 per litre. Then we had quite a fall in gas prices when we saw prices on average at 77 cents a litre.”

Toews said consumers quickly adapt to the new reality and just as quickly forget what prices were like a few months ago. “Now we view $1.07 (a litre) as high. It doesn’t take long to reset our expectations. We have a short memory.”

But with crude oil prices hovering around $60 US per barrel (WTI), Toews expects that gas prices will remain around $1 per litre for some time.

“Crude oil makes upwards of 60 to 70 per cent of the cost of a litre of gas,” he said. “We saw crude going into the low $40s, so we’re basically 50 per cent higher than what we were (in January and March). That’s certainly going to translate into higher (gasoline) prices.”

With the Victoria Day long weekend behind us, the summer driving season is well underway and pump prices will be going up, Toews added.

“We’ll see a bit of a lull in June, but with summer driving season in full swing in July, I would expect to see slightly higher prices in July and August. We could see prices at $1.10 to $1.15 per litre, which is good. That’s 15 cents a litre cheaper than last year.”

“WE SAW A SIMILAR PRICE HIKE ON MAY 6. THE AVERAGE WENT OVER $1 THEN IT CAME BACK DOWN TO 98 CENTS ON AVERAGE.”

JASON TOEWS