Sask. gas prices lower than originally predicted to end 2022

A man pumps gas in Montreal, Friday, March 4, 2022. THE CANADIAN PRESS/Graham Hughes

Gasoline prices in Saskatchewan are significantly lower than some experts predicted they would be as the holidays approach.

As of Monday, the average price of regular unleaded gasoline in Regina was about $1.46 and Saskatoon was even cheaper at $1.38, according to Gaswizard.ca.

Earlier in 2022, prices climbed as high as $2.08 in the Queen City before dropping to about $1.55 in mid-August.

It was then that some experts predicted prices would consistently climb up again through the fall and into the holiday season.

Dan McTeague, the president of Canadians for Affordable Energy, said the unexpected price drop in Saskatchewan and across Canada can be blamed on fearful markets.

“First of all the markets panicked and then they turtled,” McTeague said. “Now they’ve created a far more serious problem because we’ve seen 10 or 15 years of under investment and as a result we’re seeing of course the telling effect with diesel, which really hasn’t moved a lot [from the price it was this past summer],” McTeague said.

McTeague said he is confident gasoline prices will start to climb in the new year.

He said that can be blamed on multiple things such as colder weather and other countries further reducing their production of oil.

“At the same time we’re looking at Saudi Arabia and Russia and OPEC [Organization of the Petroleum Exporting Countries] in the first week of January saying enough is enough with this dysfunctional energy market.”

McTeague said that means they will reduce production more than what has already been seen, which means the world will be scrambling for energy and therefore willing to pay more to secure it.

“The fact that we saw these prices drop based on a number of headline head fakes is one thing, but it’s likely to lead to lower prices [first] which are in turn generating even higher demand and what that’s going to do is put even greater strain on very limited and scarce supplies,” McTeague said.

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On April 1, the federal price on carbon also increases, which will raise the cost of gasoline about three cents per litre in Saskatchewan.

The spring mix also arrives midway through April and will also cause gasoline prices to rise anywhere from three to six cents.

As for diesel prices, which have not dropped like gasoline prices, McTeague said there is still room for the cost to increase.

“Diesel has more room to move up for sure. As colder weather kicks in diesel demand grows, not just in terms of transportation, not just for airlines, not just for furnace oil, but also because of demand in places like Europe where there is a natural gas shortage they’re now using more diesel,” he said.

McTeague said diesel is also used for fertilizer and that diesel prices are moderate today compared to what they will be early in the new year.

WHY HAS GASOLINE BEEN CHEAPER IN SASKATOON THAN REGINA?

The difference in price for regular gasoline in Saskatchewan’s two major centres can be blamed locally on service stations setting the price and how willing they are to undercut each other, according to McTeague.

On Monday the average price for regular gasoline in Regina was about $1.46, in Saskatoon it’s about $1.37.

However, some Regina service stations have dropped their price to $1.39 on Tuesday morning.

“On Monday the wholesale rack price for gasoline in Regina is 77 cents a litre, in Saskatoon it is 77.4 cents, McTeague said.

“When you add your federal 10 cents a litre and 15 [cents] from the province and 11.5 cents from the federal carbon tax and multiply that by five per cent it comes to $1.18.9 cents a litre. So the difference between that $1.18.9 cents a litre and $1.46.9 is the retail margin being charged in Regina. The difference between that $1.19.3 and $1.37.9 is the retail margin in Saskatoon.”

McTeague said is there is a 19 cent retail margin in Saskatoon, whereas in Regina it’s closer to 27 cents a litre, depending who the brand is.

“The fact of the matter is that retail margins are extraordinarily generous in Regina and I think it’s high time gas stations begin to reflect on the fact that taking advantage of the public is not a very smart way to conduct business even before Christmas,” McTeague said.