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Higher gas prices here to stay: analyst

Jan 5, 2017 | 9:49 AM

LETHBRIDGE – A big jump in local gas prices is being blamed on some temporary supply problems in the states. But an analyst says other long-term factors will keep our prices higher for good.

“When it comes to prices over the year 2017, we’ll see that Alberta is displaced as the cheapest place to buy gasoline, replaced now by Manitoba and Saskatchewan, both provinces who have been reluctant to have a carbon tax,” Dan McTeague, GasBuddy.com senior petroleum analyst, said in an interview. He’s predicting an average price in the area of $1.10 per litre.

McTeague explained recent increases in the wholesale price totalling 12-13 cents per litre can be attributed to problems with refineries in the U.S. impacting the supply. He added that puts the squeeze on gasoline retailers who find themselves not even breaking even in an attempt to compete with big box stores.

But in addition to the 4.7 cent carbon tax that took effect in Alberta Jan. 1, there are two other issues this year that McTeague said will keep prices higher to stay.

“One isn’t as well known, that’s the OPEC cutback on production,” he said. “That’ll be good, obviously, for the Alberta economy if we can start to see oil prices moving up a little bit. It’ll be even better if we can get more pipelines like Keystone approved.”

But the Canadian dollar is predicted to sink, which will mean higher prices, McTeague added. He thinks it would be a “miracle” if prices are below a dollar at any point this year.