If you’re thinking about when to fill up the tank this week, you may want to get to the station Thursday evening — and definitely before Friday, a gas affordability expert says.
Dan McTeague, the president of Canadians for Affordable Energy, told the Star he’ll be filling up his own tanks on Thursday after 6 p.m. ahead of a likely spike in gas and diesel prices Friday, spurred by the apparent collapse of negotiations between the U.S. and Iran.
U.S. President Donald Trump warned Iran on Wednesday that the U.S. was preparing for further strikes, just hours after saying that the ceasefire was over.
“We hit them very hard last night,” Trump said when asked about a possible return to hostilities. “We’ll probably hit them hard again tonight.”
As a result, McTeague said average prices at the pump in the Greater Toronto Area could see a minimum seven-cent-per-litre increase come Friday, with diesel jumping 16 to 17 cents per litre — pushing diesel from roughly 185 cents per litre back above the $2 mark, to around 202 cents.
Crude oil prices increased more than six per cent Wednesday after Trump’s comments. However, it can take a couple of days for movements in wholesale markets to reach retail prices, meaning that drivers could start to feel the effects at the pumps come Friday.
“I’m going to be filling up all three vehicles, and maybe even my lawn mower,” he said.
Gas prices in the region sat at 166.9 cents per litre on Wednesday and are expected to dip about two cents to 164.9 on Thursday, before climbing to roughly 171.9 cents on Friday, he said.
That makes Thursday the day to fill up, McTeague advised — particularly in the evening, as Toronto-area retailers often drop their margins by five or six cents a litre after 6 p.m.
“You could find gas stations selling fuel for as little as $1.58, $1.57 in places in and around the GTA,” McTeague said.
“Brace for impact,” he said, acknowledging that markets still had hours left in the trading day, and that Friday’s increase could climb higher than seven cents.
Why prices are climbing back up now
McTeague pointed to U.S. President Donald Trump’s comments Wednesday — and the NATO secretary general’s backing of strikes in Iran — as the signal that any near-term ceasefire or negotiated peace is off the table.
That shift, he said, marks a distinct turn from the market fluctuations of recent months, in which wealth managers and hedge funds had been shorting oil, keeping prices lower than supply-and-demand fundamentals would suggest. That appetite, McTeague said, has now evaporated.
“The gig is up, the levee has broken,” he said, adding that traders are now finding they can’t cover their short positions — which is likely to push prices much closer to reflecting fundamentals.
The actual supply and demand for oil — instead of the prices that had been influenced by market speculation — paint a tighter picture for Canadians than pump prices have suggested, as demand remains high while supply is constrained.
Global supplies are, by most analyses, roughly 1.3 to 1.5 billion barrels short of where they sat a year ago, McTeague said, with inventories drawn down and markets propped up by emergency supplies — the full effect of which he expects drivers to start feeling Friday.
A cost-of-living squeeze
The pain won’t be limited to the pump. Toronto-area drivers are already paying about 30 cents per litre more than they were in July 2025, McTeague noted, and he expects that knock-on effect to accelerate if the standoff isn’t resolved.
McTeague said inflation will likely be up again next month, as it has been in previous months because of the war — compounded by a relatively weak Canadian dollar, which now trades at about $1.418 to the U.S. dollar. As a result, Canadians pay more for other commodity priced in U.S. dollars including coffee, palladium and lumber.
Even though Canada is the world’s fourth-largest oil producer, the price at the pumps is shaped by a global system that spans trading routes in the Middle East to the tickers on Wall Street.
The price of gasoline isn’t a figure decided overnight, but is rather made up of a sum of moving numbers that begins with the price of oil, which is eventually processed into gasoline.
Organizations and major banks publish forecasts on future oil demand based on factors such as economic growth and seasonal consumption patterns.
Traders and oil companies then use the forecasts to help decide how much oil might be needed in the near future, influencing the market expectations and in turn, prices.
“It’s like a stock market,” according to economist Jim Stanford. “Investors are making bets on what’s going to happen next.”
With files from the Associated Press
