Forecast for Metro Vancouver gas prices remain unpredictable: Analysts

Metro Vancouver's average gas price hit $1.97 a litre around midday on Wednesday, with analysts predicting more increases still to come.

If you’re feeling unsure about that summer road trip after gas prices spiked this week, you’ll have to get comfortable with uncertainty. Gas prices in Metro Vancouver are trending up again after a peace deal between the U.S. and Iran folded this week, with renewed conflict once again choking the Strait of Hormuz and limiting the movement of oil following weeks of gradual recovery. In response, gas prices in B.C. and across Canada have jumped.

Vancouver’s average gas price hit $1.97 a litre around midday on Wednesday, while the national average hovered around $1.68 the same day. How long the spike will last is anyone’s guess, though gas analysts agree it will get worse. “It’s obviously a very unpredictable situation on how much worse it’s going to get,” said Patrick De Haan, a petroleum analyst with Gas Buddy, citing the uncertainty over whether the U.S. will launch a new wave of attacks on Iran or whether there will be a de-escalation.

“As soon as there are hints of de-escalation or something proven, we could see prices start calming back down. But for now, we’re not in that mode yet. We’re still in the escalation phase.”

Dan McTeague, petroleum analyst and executive director of Canadians for Affordable Energy, suggested a “reckoning” is on the way, citing fuel demand in China, shrinking emergency oil reserves in the U.S. and Ukrainian drone strikes on Russian refineries as international factors that have pushed up the price of gas locally. “So all of these factors mean ... that by the end of July, we’re going to see some pretty massive increases. Not just in the price of gasoline but diesel too,” he noted.

McTeague believes prices could be up another 15 cents by late July, reaching as much as $2.10 or $2.15 a litre. While it’s still below the highest recorded gas price in Vancouver — which was about $2.24 in spring 2022 — McTeague says the unpredictability of the conflict combined with supply-and-demand factors could make that high-water mark a possibility once again. And while some may be tempted to consider an electric vehicle in response, it’s not a perfect solution.

“The reality is that the world is currently dealing with a crisis of which you’re not going to be able to solve simply by saying, ‘Everybody jump into an electric vehicle.’ The problem is much bigger than that,” McTeague said. Meanwhile, De Haan suggested that households could “slim down the impact” of gas prices by changing the way they drive, instead of cancelling road trips outright.

“Things like how you drive can have a major impact on how much distance you get out of that tank of fuel, right? If you’re driving aggressively, if you’re going above the speed limits, your car is going to be consuming more fuel in the process,” he pointed out. “The harder your engine works, the more fuel you consume.”

De Haan said habits like setting cruise control, reducing speed and taking a bit of extra time to get to a destination could help squeeze an extra 50 to 100 kilometres out of a tank of gas. One last tip from McTeague: “I always encourage people to never buy their gasoline in Vancouver before 6 p.m. “Gas stations control about 10, 12 cents a litre on the price of gasoline. They often trade much of that away after 6 p.m. because they’ve covered their costs for the day,” said McTeague.

“So it’s my two cents worth, literally.”