The price of oil has fallen to a six-and-a-half year low, yet the price of gasoline in Saskatoon still averages over $1.22 per litre for regular.
And while some may conclude that international oil giants are gouging consumers at the pump, associate professor Joel Bruneau says that’s probably not the case.
Bruneau teaches economics at the University of Saskatchewan, specializing in international trade and natural resources.
“I think every year, at about this time of year, this question comes up,” he said. “There seems to be this universal mistrust of big oil companies; that somehow the big oil companies are behaving in a fashion that’s bad for consumers. I don’t think there’s much evidence (of that)… I think this is just the way that the market works, and people are sensitive to it.”
Though crude prices are the largest contributing factor to the price of gasoline, Bruneau says it’s being off-set this year by a low Canadian dollar.
A similar pattern has emerged at the pump over the last five years, driven partially by the simple rules of supply and demand, Bruneau said. Every spring and summer, when agriculture, construction and tourism ramp up, so does the demand for gasoline.
At the same time, refining capacity across North America has dropped in the past decade as previously high oil prices made oil refining less profitable.
“Every year, gasoline prices in Saskatoon go from a winter low to a summer high, going up about 15 to 20 cents, and then they return back to these winter lows,” he said. “We’re seeing exactly the same pattern this year.”
If the pattern holds true, consumers can expect a lower price at the pump as winter approaches.