(File photo/ paNOW Staff)

By Nigel Maxwell

Fuel prices

Gas price spike sign of economic recovery, says analyst

Feb 26, 2021 | 5:00 PM

While motorists may be grumbling over a recent jump in gas prices, a Canadian petroleum analyst is suggesting the increase may actually represent a sign of an economy on the rebound from months of scarring incurred by a pandemic.

The price at the pumps in Prince Albert jumped seven cents from $1.09 to $1.16 per litre. Consumers in North Battleford, Melfort, and La Ronge are paying the same. Patrick De Haan, the head of petroleum analysis with GasBuddy, explained the increase is happening across North America due, in some part, to the cold weather spell south of the border that shut down 20 per cent of all U.S. refining capacity. The other reason is the rising price of oil, which as of Thursday stood at a near-year high of $63.5 a barrel.

“Those two factors are pushing gas prices up notably. Not just in the last couple weeks but really since the start of the new year,” De Haan said.

Looking ahead to the coming months, De Haan predicted consumers can expect more increases than decrease with one caveat—OPEC is meeting next week to discuss raising oil production.

“Of course with the rise in the price of oil and with improvements in the COVID-19 pandemic, demand for crude oil has gone up significantly,” he said.

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De Haan explained if OPEC does raise production, that could slow down any potential increases.

Are we paying too much?

The last time consumers saw prices this high was less than a couple years ago, but De Haan mentioned the fact that prices are going up, may actually be a positive sign.

“It’s certainly hard to explain this as a good omen but certainly it’s a sign of a broad recovery as motorists fill their tanks more often,” he said.

Price comparison (According to GasBuddy as of Friday morning)

Hague – 112.9

Big River – 112.9

Lashburn – 112.9

Saskatoon – 116.9

Meadow Lake – 116.9

Nipawin – 115.9

Creigton – 119.0

Blaine Lake – 116.9

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nigel.maxwell@jpbg.ca

On Twitter: @nigelmaxwell