Despite the price at the pump inching up a bit Tuesday morning to the $1.77/litre for regular range, overall, Metro Vancouver gas prices should start to come down in the coming weeks.
This latest bump is due to limited refinery issues in California, one place from where B.C. imports fuel.
“I would say prices would be five to 10 cents a litre lower as we get towards the end of September, early October,” explained Patrick De Haan, head of petroleum analysis at GasBuddy.
“I would say there’s a bit of a caveat right now. We are watching Tropical Storm Francine and that is projected to impact areas of the Gulf Coast down in the United States. Once this storm moves out, so long as there are no new storms following it, prices could moderate five to 10 cents a litre here between today and the start of October.”
He acknowledges there’s been quite a bit of fluctuation lately.
“The average price in Vancouver today is $1.75/litre — that is up from last week when prices were about $1.72.4/litre. But a lot of the other statistics are looking fairly good,” he explained.
“Prices are down three cents a litre from a month ago. The price now is about 24 cents lower than last year and with us getting into the cooler months, Canadians tend to drive less as we progressively get into the colder weather and it’s that decrease in demand that should continue to push prices lower.”
De Haan says the region is also about a week away from switching to a cheaper, winter blend of fuel.
“By the end of the year, if things go well, prices could be 10 to 25 cents a litre lower by the time we start to get closer to Christmas and the end of the year.”
GasBuddy says the national average could fall to $1.35/litre for regular by early next month, however, that won’t be the case in B.C.
“You can see prices falling probably to $1.60/litre, maybe $1.65/litre closer to early October, so a decrease, but much of Western Canada is heavily influenced by more expensive crude oil, in addition to a limited number of refineries.
“Certainly, there are some challenges there, but even Western Canada is going to see a nice decrease here in the weeks ahead and it shouldn’t end with the turn to October, I do think that these progressive decreases should continue through potentially early December,” he said.
He explains diesel prices may see some modest decreases.
“Looking at average diesel prices in B.C., we’re looking at an average of $1.81/litre. That is something that tends to go up as we go into colder weather. A lot of the reason for that is diesel and heating oil, which is used to heat homes, are essentially the same product so demand for heating oil goes up and usually that pulls diesel prices with it.”
Over the last several months, the Bank of Canada has been cutting interest rates and De Haan points out that affects gas prices as well.
“The Bank of Canada and equally the U.S. Federal Reserve cutting interest rates could bring more demand with it over the long-term. Cutting interest rates will likely make borrowing less expensive for Canadians and Americans alike and that could start to boost the economy and thereby next year that could really start boosting gasoline consumption, depending on how many cuts the Bank of Canada proceeds with, over the course of winter.”
The central bank cut interest rates by a quarter percentage point last week to 4.25 per cent. The next interest rate announcement is Oct. 23.
–With files from Charles Brockman.