Vijay Muralidharan, with retail fuel and convenience consultancy Kalibrate Global, says much of the price hike is tied to crude oil prices.
He says there has been a 30 per cent increase in oil prices since the end of last year.
“In a sense, for every one dollar change in crude pricing, the gasoline price goes up by 0.55 cents, which tells us there’s a strong relationship, and the biggest driver for this is crude pricing,” he said.
Gasoline prices are also affected by the fact that refinery margins tend to go up, historically, during summer driving season, said the consultant.
Muralidharan says that there’s been a lot of volatility in the market as the oil-producing nations of OPEC, plus Russia, decide how much to increase crude output over the coming months.
On Wednesday, Saudi Arabia and the United Arab Emirates reached a deal that should unlock more supply to a tight oil market and help cool soaring prices.
“We are at the mercy of what OPEC+ is going to do so … We think that they have an agreement in place and we think that they’re going to unwind supply in a measured way, meaning that they want to keep stable prices as well,” said Muralidharan.
He says he expects to see around $70 per barrel of crude, which could keep gas prices at current levels until the end of summer.
“You’re going to see all these things flow through to August and, after that, in the fall when supply of crude comes in, when driving season slowly ends, you will see some respite.”
Read More: Summer driving season and rising crude help hike Calgary gas prices