These 5 Factors Explain Why Gas Prices Are Going To Skyrocket In Canada This Summer

It's not going to be pretty.

I'm sure you've seen our articles talking about the crazy hikes when it comes to gas prices, but I think it's really important that you know why this is happening. Gas prices are super important to our everyday lives.

Even if you don't have a car, these issues are going to affect you in one way or another. That's what makes them so scary. But the people who are really going to feel the heat this summer are the ones of us who drive cars (which is a LOT of people).

Gas prices aren't just rising because oil companies want more money. There are a lot of factors that determine how much money we need to spend per liter. And right now, there are five things that are majorly affecting the price.

Summer

According to GasBuddy, gas prices always peak in the summertime, specifically in the second week of June. And this doesn't have to do with the fact that people are driving around more or going on more road trips (well, it does a little bit). It actually has to do with the chemical composition of gasoline.

Most people (including me) don't know that the chemical composition of gasoline is actually different in summer than it is in winter. Fuel is adapted and made in different ways to better suit different weather conditions.

So that means that whenever the weather is changing, at different times in the year, oil refineries have to close down for a couple of days in order to calibrate their systems. This causes a temporary dip in supply, so the prices go up.

American Companies

Canada doesn't actually produce and refine the gasoline that is mostly used throughout the country. Refineries in the U.S are actually responsible for what we consume. Our prices are thus heavily reliant on them. Canadian prices are determined in Canada. That's the problem.

In case you didn't know, gasoline demand is rising all over the world right now. So naturally, Canada has to pay a little more. Rules have recently changed in the U.S, allowing them to sell their gas to anyone. There are more profitable markets elsewhere, so Canada is paying the price.

Pipeline Negotiations

The arguments between Alberta and British Colombia are really taking its toll on the rest of the country. Basically, they're fighting about the location of Kinder Morgan's pipeline. It's supposed to go through B.C so that they can export to the west coast, but they are fighting to stop it.

Because of this, Alberta is threatening to stop selling to B.C, which would be detrimental to their gas prices. They get most of their gasoline, diesel, and jet fuel from Alberta so this could be an enormous problem.

The effects that this is having on BC will also affect the rest of Canada. Gas shortages are no joke, neither are the gas prices in BC that are almost at $2 a liter.

Rail Strike

The Canadian Pacific rail line is having some problems right now which could result in a strike. They've been warning about network bottlenecks (which is basically congestion or blockage) since the fall and winter, but things are only going to get worse.

Two engineering unions have recently given the company a strike notice that could happen before the weekend. Imagine a major transportation company not being able to ship their product. This is going to have a huge effect on supply.

All we can do now is hope that this issue doesn't go National.

Canadian Dollar

Ah, the Canadian dollar. This little guy is responsible for all of our problems. Now seeing as oil products are priced in U.S dollars all over the world, and seeing as we are not doing so well as compared to the U.S (actually the worst major currency compared to the U.S this year), this is problematic for us.

Basically, we are getting less bang for our buck, less oil for our money. The Canadian dollar also isn't doing very well. So, if we continue to have problems, and the loonie continues to decrease in value, prices are going to get a lot worse.

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