BUSINESS
01/02/2019 13:03 EST | Updated 01/02/2019 13:12 EST

Canadian Gas Price Forecast Calls For 'Wild Ride At The Pumps' In 2019

A sinking loonie and rising carbon taxes are among the things that could end low gas prices this year.

Canadians can expect a volatile year for gas prices, says a new forecast.
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Canadians can expect a volatile year for gas prices, says a new forecast.

Canadian drivers are enjoying some of the lowest gas prices in years, but don't expect that to last through 2019, says price comparison site GasBuddy.

In a report issued Wednesday, GasBuddy analyst Dan McTeague warned Canadians to prepare for "a wild ride at the pump" this year.

"Canadian motorists can expect a year of extreme volatility at the pumps for 2019 as world markets move sharply in varying directions for the foreseeable future," McTeague wrote.

Watch: 'Take advantage' of low gas prices while you can, analyst says. Story continues below.

Traders are uncertain which way the global economy is going, so oil prices are likely to swing wildly in the months ahead. But come spring, Canadians could see the highest prices at the pumps since 2014, McTeague said.

The loonie has lost 10 cents U.S. in value over the past year, enough to push gas prices up by 2.5 cents a litre. On top of that, eight of 10 Canadian provinces are seeing either the introduction of a new carbon tax this year, or an increase to their existing one by April 1.

This "will almost certainly force up the cost of filling your tank, just in time for the summer driving season and switchover to more expensive summer gasoline," McTeague wrote.

Earlier on HuffPost Canada:


The federal government is introducing a carbon tax in provinces without their own plan to combat climate change, and the tax will translate into an extra five cents per litre on gas. Ottawa plans to send rebate cheques to consumers in those provinces to offset the additional cost.

With British Columbia set to increase its TransLink tax and carbon tax on April 1, Vancouver is poised to overtake Montreal this year as the North American city with the highest gas taxes, McTeague said.

If we go into a global recession all bets are off.Dan McTeague, GasBuddy

But there is one thing that could alter that forecast and bring lower gas prices: A global recession, something a growing number of experts say could be just around the corner.

"If we go into a global recession all bets are off," McTeague told HuffPost Canada. "The price of every commodity would absolutely collapse. But I don't see that happening."

A new agreement between the U.S. and China that ends the trade conflict between the world's two largest economies would be enough to calm nerves about a global recession, McTeague said.

In the meantime, Canadians are enjoying some of the lowest gas prices in years. Thanks to rapidly dropping prices in December, the average gas price in Canada was around $1.02 per litre on Jan. 2, the lowest average since July of 2017.

GasBuddy.com
The average gas price in Canada is at its lowest point since mid-2017.