Gas prices spike in London to $131.9/L
As predicted, the price of gasoline at most London stations spiked on Saturday.
The price for regular unleaded jumped overnight to $1.31.9/L.
High prices are likely here to stay for several weeks yet, says Dan McTeague, a senior analyst with GasBuddy.com.
“The big issue? Shortages in the U.S. northeast. Everything from Maine down to Florida is now affected,” he told CTV News Channel Friday.
At least two major pipelines -- one that ships gasoline across the southern U.S. to New York, and another that runs to Chicago -- have seen oil flows slowed or stopped since Harvey struck the Gulf of Mexico.
McTeague says with supply down, “there are very few refineries that make enough gasoline to supply markets south of the border.”
Many U.S. refiners would like to turn to Canada for oil supplies, particularly because our lower dollar makes our petroleum products a good value. But McTeague says Canada simply isn’t producing enough to meet that demand.
“Some of the refineries in Canada are going through fall maintenance, and that means we just don’t have any capacity. We barely have enough for ourselves,” he said.
“No one has got extra gasoline to sell and those who might have extra to spare for the desperate U.S. market, well they're going to be demanding a premium,” he added.
In some markets, such as Vancouver, gasoline is imported from Washington State.
As for how long these increased prices will last, McTeague says “that’s the multi-billion dollar question,” but he expects the problem to extend for weeks.
Most of the best refineries won’t be back to being fully operational for another two weeks, he said, but he added there are also other tropical storms brewing in the Gulf that could cause further delays.
“This is going to last through the month of September and likely into October as well, with some variation,” McTeague predicts.
Kent Group senior vice-president Michael Ervin told The Canadian Press that he predicts it will be “a few weeks” before prices return to normal.