Hold off on the gas if you can because prices are set to take a dramatic plunge and Canadian gas prices are expected to drop by Sunday.

 

The cost of petroleum typically “firms up” this time of year, according to Dan McTeague, President of Canadians for Affordable Energy (and also known on Twitter as @GasPriceWizard).  “The fact that they have dropped as much as they have — some 13 cents a litre in the past week alone — is rather significant and can be directly attributed to the panic in the market over COVID-19,” adds McTeague.

The widespread restrictions that have occurred because of the virus means fewer cars are pulling into gas stations particularly in places like China which is the second largest consumer of oil globally.  Add to that idled factories and the supply exceeds the demand.

In general, with COVID-19 spreading globally, demand for energy is easing as people cut back on travel and major events are being cancelled.

Crude oil prices are falling dramatically as Saudi Arabia, Russia and other oil-producing countries argue over how much production to cut in order to prop up prices, raising concerns that the dispute could lead a global economy, already weakened by COVID-19, to be flooded with an oversupply of crude. There are also reports that Saudi Arabia could even increase its oil production in order to gain market share.

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“As a result, there’s plenty of oil to go around,” McTeague says, leading to the price drops. “Between coronavirus and the OPEC inability to meet the objective of further oil cuts is one of the main reasons why oil and gasoline and diesel and aviation fuel are truly in a freefall.”

Bottom Line: Prices will be better at the pumps for now and it’s predicted that prices will drop “well below” the range seen about a year and a half ago when some pumps read 97-98 cents a litre at the highest, while other dipped below 90.

For up to date information on all the gas prices in Ontario, visit GASBUDDY.

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