Why the price of gas isn’t dropping

If you’re spending more money on gas than you’d like, you’re not alone.

Gas prices have hit $1.28 in Hamilton and Oakville. In St. Catharines, it’s not much lower, sitting at $1.26.

“What I don’t understand is why when the price of the barrel of oil goes up by $1.50, gas will go up by 12 cents a litre but when it comes down by $1.50, gas goes down by 2 cents,” says one angry driver in Hamilton.

Other drivers are asking the same question, but the fact is gas markets are very different from oil markets, and the rising price of gas is due to other factors.

“We’ve pushed ourselves into a corner, especially in Eastern Canada, we’ve shut down refineries, We’ve shut one down in Oakville, another one in Montreal, and another in the Maritimes. At some point we’ve got to ask our neighbours, the Americans, for our gas,” says Dan McTeague of tomorrowsgaspricetoday.com.

Canada imports almost a third of its gasoline and then there’s the rising price of ethanol.

“The blend is pretty substantial, and the price of ethanol has gone through the roof,” says McTeague.

This time last year, the average price of gas was $1.22, the year before that it was $1.17.

A weakening Canadian dollar is also a factor in why we’re paying more for gas this year.

“We’ve lost almost 4 cents of value in the past 8 to 9 weeks. Because we price all of our commodities in U.S. terms, that means you instantaneously have to pay that 4 cent a litre premium.”