Canadians can expect to see a modest drop in gas prices by the end of this week, but the reprieve will be temporary.
Dan McTeague, president of Canadians for Affordable Energy, predicts gasoline prices will go down by roughly four to five cents a litre across the country but will soon bounce back up as unprecedented demand continues to affect supply, causing the markets to overcorrect.
Mr. McTeague says there was an “unprecedented draw in oil inventories in the United States of 17 million barrels” on Aug. 2, meaning a decrease in commercial crude oil inventories from the previous week.
He told The Epoch Times that demand is greater than supply, and inventory levels are continuing to drop dramatically.
“In 40 years this has never happened,” said Mr. McTeague, who served as a Liberal MP for 18 years and now criticizes what he calls “practical insanity” in current government policies on energy.
He said while prices will go down and remain “relatively calm” for a week or so, “all hell’s going to break loose and we are going to see prices move up and stay up, especially for diesel which is in incredibly short supply.”
Energy Policies
Mr. McTeague said a lot of blame lies with the Liberal government’s energy policies and climate “fanaticism” under environmental, social, and corporate governance (ESG) strategies, which he says are “a death warrant to the Canadian economy.”“Every April 1, the federal government will continue to add to and compound that misery by adding another four or five cents a litre in carbon tax,” says the analyst.
He said that given Canada’s cold climate and reliance on hydrocarbons as a whole, plus a weak Canadian dollar, the government’s energy policies and rising carbon taxes are adding unnecessary pain and financial stress to Canadians who want to fill their car with gas.
At some point, likely by 2025, Mr. McTeague predicts that refineries will no longer be able to blend any additional ethanol into gasoline, and that will mean an additional 30-cent cost increase will be passed on to consumers, forcing them to cover the cost of carbon credits required to make up for emissions.
“These ESG policies by an idealistic fanaticism has gripped the country and is driving it into the ground, literally,” he said.
The Weekly Petroleum Status Report, published by the U.S. Energy Information Administration (EIA), indicated on Aug. 2 that “at 439.8 million barrels, U.S. crude oil inventories are approximately 1% below the five year average for this time of year. Total motor gasoline inventories increased by 1.5 million barrels from last week and are about 6% below the five year average for this time of year.”
Oil prices hit a three-month high on July 31, recording the highest monthly gains since January 2022, at the same time oil inventories were dropping significantly.
Mr. McTeague said the EIA admitted it underestimated U.S. demand by 1 million barrels a day, placing demand at the highest levels since 2005.
According to the analyst, inflation is being driven in part by gasoline and diesel, which are fundamental components of the economy, and the continued increase in carbon taxes is now hitting consumers hard financially, and not just those who drive.
“It’s not just those who are driving vehicles, who have the luxury of going from point A to point B, it’s folks that are looking at the grocery checkout, it’s folks looking at the utility bills,” said Mr. McTeague.
“North American energy markets are dysfunctional,” he added.
