LETHBRIDGE, AB – If you’re waiting for prices at the pump to drop before filling up your tank, you may be waiting a while.
With prices in Lethbridge sitting as high as $1.33/L, it exceeds the highest average price recorded in the last three years, when Calgary sat at $1.31.4/L in July 2018, according to Statistics Canada.
Head of Petroleum Analysis at GasBuddy.com Patrick De Haan says consumers are facing a situation that has seen demand for gasoline surge faster than oil production.
“With plenty of opportunities to get out and hit the road this summer, a relatively short summer, Canadians are doing just that and so are their American counterparts,” he says.
“Gasoline demand has staged a remarkable recovery, and it’s for that reason we have seen such a rally and the reason we’re all paying more at the pump.”
De Haan says if the situation were normal, it would likely correct itself in a short amount of time. However, he adds the long-term effects of having such a steep drop-off in demand in the first place has created a fairly bumpy road thus far.
“Last year, Canadians parking their vehicles for several weeks, being told to stay at home, oil prices plummeting as a result of low price and low demand left some pretty deep wounds the industry is still healing from,” he says.
“Now there have been various labour challenges bringing some of that oil production back online, so this is something that may take not just months, but potentially a couple of years for the oil industry to fully get back on its feet again and to boost output to pre-COVID-19 levels.”
The last time prices were higher was in 2008, after the global economic collapse, considered by economists to be the worst financial collapse since the Great Depression.