Price spike forecast for April, May
Apr 11, 2008 - 05:47 PM
By Moya Dillon
DURHAM -- Get ready to pay $1.25 at the pump.
Durham gas prices hit $1.14 this morning, with Bowmanville leading the pack but Oshawa and Whitby soon catching up. That’s up from $1.11 earlier in the week, with gas analysts saying this upward trend will continue throughout the summer as oil companies try to make up for losses caused by high prices for crude.
“Oil companies are frustrated that they can’t get pump prices to reflect the increased cost of crude, which has gone up about 40 per cent, or 24 cents a litre, higher than a year ago,” said Robert McKnight, a senior petroleum analyst for En-Pro International. “Pump prices are going to rise dramatically.”
Mr. McKnight predicts prices ranging from $1.30 to $1.32 by the last week of April or first week of May, when pump prices finally catch up to increased crude costs. This would break the previous 2005 record, when pump prices hit $1.29 in the aftermath of the destruction caused by Hurricane Katrina.
He expects prices to follow the traditional cycle of the summer driving season, with a run-up heading into the May 24 holiday weekend, followed by a slight price retreat until Labour Day weekend.
“It’s a cyclical thing,” he says of the summer season. “Oil companies are creatures of habit so whatever they did last year, they’re going to hit again this year.”
This means drivers can expect to be paying about $1.25 during holiday weekends this summer, Mr. McKnight said.
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