Ontarians should brace for a “tug of war” regarding gas prices as limited supply and increasing political unrest in the Middle East influence pump costs, according to an expert.
On Friday, gas prices jumped roughly five cents per litre for gasoline and about 13 cents for diesel, noted Dan Mc Teague, president of Canadians for Affordable Energy.
He attributed the rising prices to renewed violence and uncertainty surrounding the possibility of a ceasefire between the U. S. and Iran.
However, these costs could see some relief as American entities like the U. S. Treasury attempt to keep prices down by purchasing “short positions,” Mc Teague explained. A short position is a trading strategy where an investor buys and sells an asset quickly in hopes of buying them back at a lower price.
“[The U. S.] are trying their very best for political reasons … to keep the price of energy down,” said Mc Teague.
“I suspect that has a lot to do with the Trump administration’s interest in making sure that gasoline and fuel prices don’t become an issue as he and his party head for their midterms.”
He anticipates a slight decrease in gas prices with a one-cent drop on Sunday. However, En-Pro International, which specializes in energy cost analysis, shared on social media that they predict a three-cent decrease heading into the weekend.
The back-and-forth hostilities between the U. S. and Iran reignited this week after President Donald Trump indicated that Iranian attacks on ships in the Strait of Hormuz ended the fragile ceasefire and warned of escalating conflict if they didn’t cease.
A conflict in that area would affect multiple nations and could disrupt energy shipments through the strait that are vital for the global economy.
Expert Predicts Significant Price Increase If Supply Remains Low
The current low costs represent just a “short term slight gain” ahead of “long term pain” expected if supply continues to be low across Canada, the U. S., and various other countries, Mc Teague stated.
“Supply is very low, historically low and demand is extraordinarily high,” he said. “They are suppressing the price through manipulation. In the future, markets suggest that we are going to see a correction at some point, but no one knows when.”
He mentioned that even with ongoing efforts to maintain lower costs and with Canada’s federal government reducing excise tax, gas still sits about 30 cents higher than it was last year at this time.
Yet those prices will “inevitably” rise as global demand struggles against decreased supply due to conflicts in the Strait of Hormuz.
“The world is going through and used up much of its strategic reserves, its emergency reserves,” he said. “Prices aren’t really reflecting the severe reality that the world is short 1.3 billion barrels.”
Civilians Feeling The Impact Of Global Politics
“Dirty politicians” worldwide are making life tougher for regular people everywhere, remarked taxi driver Ramanuj Bolnick.
He expressed how challenging it is to manage rising expenses while being a “daily driver” trying to earn a living.
Toronto resident Sakib Bhopari mentioned he’s had to cut back on other expenses just to cope with gas prices.
“We the general people are suffering for this,” he stated. “I’m just living day-to-day; so we just have to deal with it.”
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