Here’s why gas prices jumped 14 cents

Gas prices have been steadily climbing this month, but many Ontario residents may have been surprised to see the price at the pump jump by 14 cents per litre on Thursday.

In March, gasoline prices in Canada rose 4.5 per cent compared with a year earlier, in part due to higher global oil prices. Gas prices pushed the annual inflation rate higher in March, even as core inflation decreased for the month.

But it wasn’t inflation that caused the surprise jump in gas prices, experts say, and it wasn’t the much maligned carbon tax. So what caused the jump in gas prices, and will they fall back down to Earth? Here’s what experts have to say.

As we enter the summer months, gas stations transition to a “summer blend,” which contains alkylate, a component added to gas that boosts octane, Dan McTeague, president of Canadians for Affordable Energy, explained.

Gas stations are, by law in the U.S., required to transition away from the winter blend, which contains butane, a compound that easily evaporates but is useful for igniting in cold temperatures.

The cost of alkylates have jumped thanks to a spike in demand, as gas blended with alkylates is cleaner and able to meet better fuel-efficiency standards.

That all led to a 14-cent jump in gas prices on Thursday, as markets in the U.S. made the switch over to the summer blend, forcing prices higher.

That also means that, no matter if you head south of the border to fill up on gas or travel to another city in order to save on fuel costs, prices will have jumped, or will soon jump, all the same, McTeague added.

Prices will cool a bit Friday, dropping by four cents, McTeague said, and could go down again another cent on Saturday. But, the outlook for the rest of the summer is relatively stable.

“U.S. summer driving season demand after the May 24 weekend and maybe the odd hurricane could keep prices in the low $1.80-a-litre range until Sept. 18,” McTeague predicted.