© Jeff McIntosh / The Canadian Press archives
A pumpjack works at the head of a well at an oil and gas facility near Cremona, Alta.
Albertans are starting to pay more at the pump after a price war between Saudi Arabia and Russia, and the COVID-19 pandemic bottomed out earlier this year.
The province’s average gas price on Tuesday was 98.3 cents per liter, according to GasBuddy.com. That’s a 6.9-cent increase from last week’s average and an increase of about 78.3 cents in mid-April, the low for 2020.
Dan McTeague of Canadian for Affordable Energy said that while prices at the pump are increasing, the price of oil in the market remains low.
“We all know that it costs something to convert oil into a product known as gasoline or diesel,” said McTeague. “That is a separate market in itself and that market is influenced by factors that are not the same that influence the cost of oil.”
The oil market continues to see commodity trading at low levels with WTI Crude, the western benchmark, which is trading at $ 39.71 per barrel. The provincial government, by comparison, predicted that oil prices would be trading around $ 50 a barrel when it presents the latest budget earlier this year.
The WTI briefly traded at negative prices in April, as the market was affected by both the COVID-19 pandemic and a price war between Saudi and Russian sellers.
“Gasoline is not oil, and it is marketed very differently and regionally, based on supply and demand,” said McTeague.
He said drivers in western Canada should focus more on the price of the gasoline markets in Chicago, where Alberta trades.
Despite the price spike lately, McTeague said Edmontonians remain in a favorable place in terms of filling their tanks compared to other markets.
“There is nothing normal about gas prices at the retail level in Edmonton,” said McTeague. “Talk to any gas station owner, they will tell you that they are not making money selling gasoline.”
He said that larger retailers, such as department stores, will even sell their gas at a loss to attract customers.
“Edmonton is probably the most competitive retail market, a ruthless market in all of Canada and I would say it is one of the most dynamic and fierce markets in all of North America,” said McTeague.
