VANCOUVER (NEWS 1130) – You might have noticed gas prices trending upwards in Metro Vancouver over the past few weeks, and according to one expert, it likely isn’t over yet.
We could see gas prices go up a further 10-cents per litre over the next few weeks, explains analyst Michael Ervin.
He says prices have been going up across Canada and even North America as demand for gasoline has rebounded since the early days of the COVID-19 pandemic.
“Certainly, the pandemic — in the early months of that — cause a tremendous drop in demand for gasoline because of travel and distancing restrictions,” Ervin, who is vice president of the Kent Group, explains. “But as that starts to ease, demand for gasoline has gone up and with that, wholesale inventories of gasoline are starting to become depleted back to normal levels. With that, higher wholesale prices and higher retail prices.”
Ervin notes there are a number of variables that would determine prices at the pump, such as crude prices and global demand for that. That, he admits, has been one of the most difficult factors to predict.
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However, even with the expected increase in gas prices, Ervin notes prices are still likely going to sit lower than they did before the COVID-19 pandemic became our new normal.
“I think we’re not going to see demand at a level it was before, and with that prices are going to probably be below what we saw before the pandemic,” he tells NEWS 1130. “But how much is very difficult to say.”
It was just more than a year ago that gas prices hit a record high in Metro Vancouver, surpassing 1.70 per litre of regular in some areas. However, gas prices saw a historic low in Metro Vancouver in March 2020 as people were forced to stay home amid physical distancing requirements.
Whether we will see these kinds of prices again in the future will depend on a few things, including how much people will drive moving forward.
“In the long term, what we’re looking at are referred to as leading indicators for what gasoline demand might be, and that speaks to a term called vehicle miles travelled,” Ervin explains. “I think vehicle miles travelled will probably be depressed in the long term.”
Working from home is one reason, he says, adding whether people decrease the number of outings they make, for example to shop, is another.