Price of gas jumps again as long weekend approaches

Aftermath of Hurricane Harvey in Texas- the most powerful hurricane to hit the US in more than a decade
Aftermath of Hurricane Harvey in Texas- the most powerful hurricane to hit the US in more than a decade
Author

03 September, 2017

Several media outlets are reporting the cause is Hurricane Harvey.

If the price on any given day increases more than six Canadian cents per litre, the New Brunswick Energy and Utilities Board activates its interrupter clause, which allows the board to increase the maximum price gas can be sold for.

The price at the pump rose Thursday night in Montreal for a second time in three days, reaching an average of almost $1.35 per litre of regular fuel by Friday morning.

Montreal, where the Gazette reports gas prices have already spiked by 19 cents per litre this week to $1.35, could see a similar nine-cent hike on Saturday, McTeague predicted. The average price in Montreal was expected to climb as high as $1.42 a litre at some point over the Labour Day long weekend.

Dan McTeague, senior gas analyst at GasBuddy.com, calls it "the Hurricane Harvey Effect" as the storm has a major pipeline and 16 refineries in the United States offline. "And with that they'll be able to feed product into the Colonial Pipeline and restore inventories in the northeastern USA", said Michael Ervin, senior vice-president with Kent Group Ltd.

The uncertainty about gasoline production could stretch into a couple of weeks, he said.

Vayu senior energy analyst Keith Donnelly
Vayu senior energy analyst Keith Donnelly

"Until we get engineers into the refineries to assess the damage it's all speculation", he said.

While Canada isn't expected to experience the same supply problems, Americans could look north for more gasoline, he said.

Nearly one-third of the oil refineries in the USA south are offline from Harvey and Canada simply isn't producing enough to meet the demand.

"If you're driving with 75 litres and you're going to be travelling this weekend, the increase could be at least $7 or $8" extra to fill up, he said.

"Canadian prices rise faster & higher than anywhere else in the world signaling tight petroleum supply and market discipline: oligopoly", tweeted McTeague.

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