Cost of gas in the GTA could hit $2 a litre next month as Russian attack on Ukraine impacts oil prices: analyst
Published Thursday, February 24, 2022 10:32AM EST
Last Updated Thursday, February 24, 2022 5:03PM EST
Gas prices across the GTA will likely surpass the $2 a litre mark sometime next month as Russia’s decision to attack Ukraine and the resulting economic sanctions it will face as a result puts pressure on the cost of oil, warns one industry analyst.
Dan McTeague, who is the president of Canadians for Affordable Energy, told CP24 on Thursday that he expects the price of gas across the GTA to go up three cents this weekend to an average of $1.61 per litre.
That, however, could just be the beginning of a sustained run up in the cost of gasoline that McTeague said will ultimately drive up the price of other goods, including food.
“This is going to be a much longer term increase in the price of all commodities driven by oil and of course driven by the most serious geopolitical threat the world has faced, at least since the 1940s and 1950s,” he said. “With that in mind, it's likely that oil is going to go to at least $135 a barrel. We're at about $99 right now. The implications of course are at a time in which prices are already elevated this is only going to compound for many people a lot of pain at the pumps, among other things, as it makes its way to pretty much every other commodity including food.”
Russia is the world's third-biggest oil producer, accounting for about 11 per cent of the global supply.
McTeaque said that should the economic sanctions introduced by the global community include the blockage of oil from Russia, it could mean that the upward price pressure on crude will become “a longer term situation.”
For that reason, he is calling on the federal government to suspend a planned increase in the carbon tax currently scheduled for April 1 and to what it can to boost the production of oil domestically.
“The fact is that we're going to see much higher prices for a much longer period of time. But energy security is now back on the table. If anything (Russian President Vladimir) Putin’s actions to attack an innocent country like Ukraine, I think has perhaps caused us now to rethink our priorities, regrettably,” he said. “It is not climate, it is certainly not COVID, it is now energy security and energy affordability.”
The price of gas in the GTA is already at a historic high, having passed the previous high-water mark last month.
At the time McTeaque had suggested that prices would hit $1.65 a litre by the end of 2022, however the situation in Ukraine has changed the calculus and he now says that prices will ultimately reach levels “well above” $2 a litre.