Fuel prices in Toronto are expected to continue climbing, with forecasters predicting the price of gas to jump another six cents a litre by Friday.
Drivers felt some relief at the pump on Thursday after the price of gasoline per litre fell seven cents, but the break is expected to be short-lived.
“Today is the best day to buy fuel, so don’t think about it. Do it,” said former MP and fuel analyst Dan McTeague.
McTeague predicts the price of gas could hit nearly $1.60 a litre by the end of the week, with the price of diesel going up another 13 cents to almost $1.99.
“With that kind of momentum by the weekend,” McTeague said, “net increases since this all began will probably be somewhere in the order of 25 cents a litre for gasoline and about 50 cents a litre for diesel.”
The cost to fill up a tank has been driven up by the ongoing U.S.-Israeli war with Iran, which has led to the blockage of the Strait of Hormuz, a crucial, Iranian-controlled global crude oil conduit.
On Thursday, Iran’s new supreme leader Mojtaba Khamenei said closing the strait should be used as leverage in the conflict.
McTeague attributed Thursday’s drop in prices to U.S. President Donald Trump’s comments that the war was nearing its end, and that he would give safe passage to vessels travelling through the Strait of Hormuz.
“Obviously that is not working very well, given that several ships have been hit,” McTeague said.
He pointed to export reductions from Qatar and reported attacks in several oil-producing states, including the United Arab Emirates, Bahrain, Saudi Arabia, Kuwait and Iraq.
On Wednesday, the multi-nation International Energy Agency said it had agreed to release 400 million barrels of oil from its 32 members’ stockpiles, including Canada. McTeague is skeptical the plan will bring sustainable relief.
“That’s a Band-Aid, short-term cushion that will eventually be used up,” McTeague said. “We’re already burning through those reserves and if this goes on another two or three weeks, that final layer of protection may not prevent markets from being hit with much high prices.”
Besides the decision to fill up their vehicles, McTeague said the rising price of fuel will create additional budget constraints on households.
“We’re gonna have to now face the reality of enormous headwinds,” he said. “Call it a tsunami.”
With files from the Canadian Press and the Associated Press
