Most drivers have noticed a sharp increase at the pumps, with prices now sitting at 142.9 cents per litre at most stations; about 10 cents higher than just a few days ago.
According to GasBuddy petroleum analyst Matt McClain, the sudden jump can be traced back to an unexpected problem south of the border.
“It's actually a little bit of a situation that took place on the U.S. side of the border. A refinery in Whiting, Indiana experienced some flooding issues last week, forcing its sudden shutdown,” notes McClain. “That obviously created a little bit of a hiccup in supply. That was not only for Manitoba, but also Saskatchewan, Alberta, and the U.S. states of Wisconsin, Indiana, Illinois, Ohio, and Michigan.”
He explains that energy markets between Canada and the United States are deeply connected, and disruptions on one side often ripple quickly across the border.
“Our two nations, the U.S. and Canada, are somewhat interlinked when it comes to fuel and sometimes even electricity, depending upon what area of the two countries we're talking about,” says McClain. “But especially on the energy side with oil, a lot of Canadian oil actually supplies the midwestern U.S. refineries for being able to provide fuel and create fuel, gasoline and diesel, and a lot of that fuel then makes its way back across the border into Canada once again.”
Prices could start to fall soon
McClain adds that there is some encouraging news out of Indiana.
“The good news so far with the inspections that BP is conducting under its refinery in Whiting, Indiana, not seeing any major damage as of yet, fingers crossed. They are in the process of bringing that refinery back online,” he says. “Once that happens, we will slowly start to see prices, fingers crossed, without any additional issues over Labour Day, maybe a few cents per litre, but more than likely next week and the week after, you should start seeing prices slowly come back down to where they were prior to the sudden jolt.”
McClain continues that the seasonal transition in fuel types should also help.
“We also have the refined or reformulated summer blend of gasoline that will be coming to an end in the coming weeks as well, and that should also help ease the price at the local pump as we go along.”
Watching for bigger global factors
While the recent increase is mainly a North American issue, McClain remarks that his team keeps a close watch on wider risks.
“The only other things that we're obviously always trying to keep an eye on are, any kind of sudden tariff moves back and forth between the two nations of Canada and the U.S.,” he says.
He mentions that geopolitical flare-ups and hurricane season remain wild cards that could still move markets.
Manitoba’s average price compared to Canada
Looking at the numbers, McClain provides some perspective on where Manitoba stands.
“Right now, in Manitoba, the average is running at $1.41 per litre. That's up about eight and a half cents from the last week and a little over 11 cents from the past month,” he says. “When it comes to all of Canada right now, the national average is running at $1.40 per litre, that's up about 4.6 cents from last week and about 5.6 cents from last month.”
Even with the recent jump, McClain adds that motorists are still paying less than they were at this time last year.
“Prices are still down from this point last year by 16 cents a litre,” he remarks.
Diesel follows the same trend
As for diesel, McClain mentions that it is following the same path as regular gasoline.
“Diesel prices are looking about on par. Basically, what you're seeing on the gasoline side, you're basically seeing on the diesel side as well,” he says. “It's not a whole lot different. What you saw last week versus the increase in this week, it's roughly about the same.”