Image Credit: Adam Donnelly / CFJC Today

By Dylana Kneeshaw

GAS PRICES

Price hikes expected for long weekend gas prices as Kamloops deals with supply delays

Jun 30, 2022 | 3:04 PM

KAMLOOPS — It’s been months of paying more than two dollars a litre for gas in Kamloops, and this weekend you can expect to pay even more.

Vijay Muralidharan is the Managing Director for R Cube Economic Consulting Inc. out of Calgary, and says price hikes ahead of a holiday long weekend are common.

“Traditionally in this long weekend, the July long weekend, what data tells us is there is going to be a 2 to 5 cent a litre increase. So I’d stick to that trend (prediction), just for the long weekend,” he explains.

According to Muralidharan, geopolitical risk with the ongoing war in Ukraine continues to impact pricing. But oil demand has recently grown in Saudi Arabia and overseas countries, making the market even tighter.

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“If inflation rises at this level and personal income doesn’t match up, you’re going to see some pull back in demand in the U.S.”

This week in Kamloops, residents have begun to notice that some pumps aren’t operating. The pop-up shortages stem from an ethanol delay. Muralidharan says refinery maintenance more than a month ago caused a lag in production.

“A supply crunch happens because they stop production for 20 to 30 days, but the actual impact comes about a month later. So you’re seeing a little bit of that overhang of the maintenance on the refinery but that’s not permanent, it’s just short term impact and it should be fixed in time.”

What’s known as gas ‘demand destruction’ is already happening in Canada. And Muralidharan figures when the United States regularly hits $5 a gallon for their fuel costs, the american demand will drop and pricing will change.

“You see diesel prices pull back because economic activity is slowing across the globe because of high interest rates. So that is a turning point I guess, of what is to come.” he adds.