As gas prices in the Netherlands rise again, this industry expert says: get used to it

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Gasoline prices are on the rise again in Newfoundland and Labrador, marking another all-time high for the province. (Graham Hughes / The Canadian Press)

Industry expert says he doesn’t believe gasoline prices will drop anytime soon, as the maximum regular gasoline price rose again in Newfoundland and Labrador on Thursday by 2.2 cents per liter, setting another record for the province.

Patrick De Haan is the Petroleum Analysis Manager for GasBuddy, a gas price tracking tool that operates applications and websites based on real-time fuel price research in the United States, Canada and the United States. Australia.

“We continue to live in this COVID era where there are various bottlenecks, various challenges and various imbalances that arise,” De Haan told CBC News from his Chicago office.

“Some of the more recent factors were now completely unexpected several months ago. We have a looming energy crisis developing overseas where China is considering a small enough amount of coal to power its power plants, there is a shortage of natural gas in Europe and all of this sustains the price of oil simply because crude oil can be used as a reserve to generate electricity or to heat homes. ”

De Haan said the price of crude oil continues to rise based on global demand and because the energy crisis “will likely continue to escalate” with oil production lagging behind.

Gasoline prices are rising across Canada, not just Newfoundland and Labrador, De Haan said. The average price in Canada is $ 1.45 per liter.

In Newfoundland, the maximum price for gasoline is now over $ 1.60 per liter across the island on Thursday as part of the weekly pricing by the Public Utilities Board – $ 1.612 in Peninsula D ‘Avalon, $ 1.638 in the center, $ 1.62 in the Corner Brook area and $ 1.63 to $ 1.65 in parts of the Northern Peninsula.

In Labrador, the maximum price is $ 1.70 in Churchill Falls, $ 1.678 in western Labrador, $ 1.508 in central Labrador and $ 1.673 on the south coast.

Patrick De Haan, head of petroleum analysis for GasBuddy, says the Canadian dollar is much weaker than it has been in recent decades and is partly responsible for the rise in gas prices in Canada. (Peter Scobie / CBC)

All other types of fuel are also on the rise.

Diesel increased to 2.4 cents per liter, heating oil up to 1.95 cents per liter, stove oil up to 2.22 cents per liter, and propane heat up to three cents per liter.

Furnace oil now costs $ 1.05 in northeast Avalon, $ 1.08 in northwest Avalon, $ 1.09 in central Newfoundland, $ 1.06 in Corner Brook area and $ 1.11 for parts of the Northern Peninsula from Englee to St. Anthony.

A continuous rise

While gasoline prices are on the rise across Canada, the same is not happening in the United States. De Haan said this was due to the current value of the Canadian dollar.

“The United States, of note, has not hit record highs for gasoline or diesel while Canada is. Much of the difference can be attributed to the fact that the Canadian dollar is much weaker than it has been in the decades parity between the US dollar and the Canadian dollar, ”he said.

“Now the Canadian dollar is much weaker and that’s part of the reason for the rise in gasoline prices in Canada, as oil is traded globally in US dollars. Currency can play an important role in raising prices. “

If the Canadian dollar were close to parity with the U.S. dollar, De Haan said, average prices in Canada would be up to 20 cents per liter lower than they are today.

Shipping issues and consumer spending habits have also helped push prices as high as they are, De Haan said. If the Organization of the Petroleum Exporting Countries increased oil production, he added, “it could improve the situation considerably.”

But with the energy crisis still looming, he said, he doesn’t think there will be a significant drop in prices for several months – and maybe not even then.

“By the time some of these issues can be resolved, we could be on the cusp of a driving season next year in which prices will rise,” he said. “So I don’t necessarily see a fall in prices, but I see an upside risk, that is, prices are likely to rise or stabilize rather than fall.”

The following graph shows how gasoline prices have changed recently at retailers in Newfoundland and Labrador, as reported by users of the GasBuddy.com website.

Read more about CBC Newfoundland and Labrador


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