Gas jumped to $1.24 per litre on Wednesday, up from $1.08 on Tuesday. Making the 16 cent increase one the most drastic one day jump in recent memory.
The spike in gas comes amid the lowest cost for crude oil in six years.
Roger McKnight, chief petroleum analyst with Enpro, says these commodities are not attached at the hip, as many think.
“A lot of it has to do with the loonie, and a lot of it has to do with refinery outages, and the time of year,” said McKnight.
The low dollar diminishes our purchasing power with the United States , meaning that all petroleum products from the US will cost Canadian companies far more. This is also typically when people drive the most, which drives up demand for gas.
Also, refineries in the US, specifically have been operating under capacity. Specifically a BP Refinery in Whiting, Indiana has been producing at 50 per cent capacity. The refinery, and several others across the American midwest, buy and refine western Canadian select crude oil.
This lack of production has driven prices up in the midwest and also in Canada, says McKnight.
“Gasoline prices in Canada are determined by what happens in the States. All you need is a little bit of a hiccup,” said McKnight, adding that the jump in price “is completely out of line.”
But good news, “historically gasoline prices reach their lowest between the middle of September and the middle of January. You’re going to see the same thing this year,” says McKnight.