Massive winter storm in Texas, Northern Mexico fuels gas price hike in PG

Prince George drivers have seen a dramatic 13-cent hike recently at the pumps.

Fuel prices at most stations are at 129.9 cents a litre while Costco remains a bit cheaper at 124.9.

Prior to this, the price of gas held steady in the northern capital at 116.9.

Dan McTeague with Canadians for Affordable Energy told MyPGNow.com the recent snowstorm and power outages in Texas and Northern Mexico is what’s causing all this.

“What happened is that one-third of all US oil and gas production is now knocked out. This is a one in a century event where pipes freeze and we see unusually cold weather stretching all the way down to Mexico and has caught most refiners off guard.”

“Now, say this happened in Florida it wouldn’t be such a big deal but Texas, Oklahoma, the Bakken, the Permian, all these basins which are well-known for producing much of the US’s oil aside from what Canada exports to that country have been really knocked off-line.”

McTeague hinted that tougher times could be ahead for drivers as major relief at the pumps isn’t anywhere in sight.

“There is a wide sense that there will be a shortage of fuel. Certainly, there is a shortage in that region but this could be longer-lasting than expected and that has what’s really driven up prices on the wholesale side, five cents per litre and that has triggered a bit of an avalanche.”

“Their cost for fuel today (Prince George gas stations) is about a dollar twenty-two and they can’t be selling it for a dollar fifteen or seventeen without losing their proverbial shirt. What goes in the United States when we see prices moving up there and what happens in the American market where commodity prices are all formed of all commodities – when something like this happens, we almost are having to pay for it instantaneously.”

What’s even more concerning is that regions like the Lower Mainland could reach fuel prices north of $1.70 per litre by summer.

While those price implications would mostly be felt in the southern half of BC, regions like the north won’t exactly go unscathed.

“We’ve seen prices go up rather dramatically mostly because of the belief that the United States rolling out so many of its vaccinations that there’s a sense that demand will be on the upswing and that means, of course, we could be seeing an unusual bump in demand while supply is going to be crimped because there is a lot of catching up to do.”

“We could see prices in this range (in the north and Vancouver Island) maintaining throughout much of the summer. There may be a bit of a lull in prices between now and April but after that, all bets are off especially if the COVID pandemic and all vaccinations roll out quickly,” added McTeague.

However, McTeague stated prices could dip by about three cents by tomorrow (Saturday) or Sunday.