Why are gas prices in Canada suddenly so damned high?

Tristin Hopper

All of a sudden, Canadian gas prices are reaching heights not seen since the release of Sharknado. Even in a cheap fuel haven like Canada, prices are peaking as high as $1.26 per litre in Edmonton and $1.28 in Calgary. In B.C., the average price is an incredible $1.38 per litre, breaking $1.40 in Vancouver.

So, the National Post called up Dan McTeague with GasBuddy.com and a semi-obsessive expert on all things petroleum. Below, the surprisingly complex backstory to why your Honda just got way more expensive to run.

Blame it all on a production slowdown in the U.S.
Despite our oceans of oil in Canada and Newfoundland and Labrador, Canada still gets much of its gasoline from U.S. refineries. ExxonMobil just slowed operations at its Joliet, Ill., refinery to carry out some seasonal maintenance. Same deal at a BP refinery in Whiting, Ind. Then a Texas-to-Oklahoma fuel pipeline sprung a leak, necessitating a temporary shutdown. All of these events barely merited a mention in the news, but they’re collectively costing consumers millions in pricier gas. Much of the Canadian gasoline market is subject to the Chicago wholesale price for gasoline. At the beginning of October, it was $0.56 CDN per litre. Now, it’s shot up to $0.65 CDN. And, of course, the end cost is significantly higher for Canadian drivers once taxes, transport costs and profit are all tacked on.

The Americans have been particularly thirsty for gasoline lately
A leaky pipeline and some routine maintenance are “relatively mundane factors,” as GasBuddy noted in a blog, but they’ve been helping to spike prices for the simple reason that Americans suddenly need a lot more gas. U.S. consumers are demanding 257,000 more barrels of gasoline, per day, than this time last year. The country’s economic growth is at three per cent and unemployment is continuing the plunge it began in 2010. It all makes for more cars and trucks on the road, and greater stress on the U.S. fuel supply. This time last year, the U.S. Midwest had 49.5 million barrels of gasoline on hand. Now, it’s down to 45.5 million barrels. “This is the lowest we’ve been in a very, very, very long time,” said McTeague. The result is that the U.S. is similarly getting hammered by higher gas prices, although not nearly as badly as in Canada. Right now, California is home to the highest gas prices in the United States. Still, if Leonardo DiCaprio knows where to look, he can fuel up his Range Rover for the equivalent of 91 cents CDN per litre.

full story at http://calgaryherald.com/news/canada/why-are-gas-prices-suddenly-so-damned-high/wcm/33551d49-f96a-46a8-bc71-0d009cce67e9