Is Gas Prices in Canada Are Expected to Hike in 2024 ? All You Need to Know About Increase Amount, Future Prices

As Canadians step into this year, due to economic shift in the global market, the idea of rising gas prices possesses a concern as it is casting a cloud of economic instability for both general consumers and businesses. Gasoline, a lifesaving medicine for transports and a key component of various industries, is expected to increase in cost due to various factors, ranging from environmental regulations to global market situation.

The main idea behind this scheme is to curb the gas prices to help people with their financial issues and economic status. This article will delve into the factors leading to increase in gas prices in Canada and the potential impact for the economy and investments of people.

Gas Prices in Canada 2024

Being a significant producer of gasoline through various regions like Alaska and Alberta, Canada witnessed fluctuating prices for gas in 2023, even getting a 16 percent decrease in the third quarter of 2023. This reduction was due to global slowdown in demand and oversupply of fuel and carbons worldwide. If the statistics reports from fuel forecast energy trends are to be believed, then gas prices are likely to increase till 2nd quarter of this year due to sudden increase in demand but may fall in the next few years. Gasoline production is somewhere linked to crude oil, and fluctuations in crude oil prices can have a direct impact on costs at power stations.

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For this quarter, gas prices in Canada are expected to increase by 2.5% which can lead to CAD 1.50/litre.

Overview of Current Gas Prices in Canada

Name Increase in gas prices in Canada
Country of Origin Canada
Regulating body / Department Canada Revenue Agency (CRA)
Year 2024
Category Energy and natural resources
Current Price (Canadian Dollar/litre) 1.44
Expected Price (Canadian Dollar/litre) 1.50
Reason to increase gas price Increase in global crude oil prices.

Carbon Tax.

Objective To increase environmental goals.

Less carbon footprint.

Affected people/industry Consumers

Low-income households

Transport industry

Is Gas Prices in Canada Are Expected to Hike in 2024 : Know Increase Amount, Future Prices

Factors leading to increase in Gas Prices in Canada 2024

1. Global Oil Market Dynamics and Currency Exchange Rates:

Canada is one of the net importers of crude oil and the issue of global oil market significantly impact gas prices. Fluctuations between Canadian dollar against U.S. dollar can influence the cost of crude oil. As oil is priced in US dollars globally, so it can increase gas prices in Canada.

2. Environmental Regulations and Supply and Demand Dynamics:

Canada’s commitment to environment conservation, indicated by carbon taxes and cleaner energy regulations, leads to higher gas prices. Additionally, supply and demand dynamics, further influenced by economic recovery and industrial activities leads to the increase.

3. Global Economic Conditions and Production Costs:

The overall health of the global economy influences oil prices, subsequently affecting gas prices in Canada. Economic growth or decline can also impact oil consumption patterns. Meanwhile, production costs due to raw materials availability and refining margins also plays a role in determining the final cost of gasoline.

4. Seasonal Variations, Weather Events, and International Issues:

Variation in seasons such as increased travel during peak seasons, issues in transportation due to unexpected weather events, and geopolitical issues such as the Ukraine-Russia war contribute to the fluctuations in gas prices.

5. Global Political Instability and Transportation Costs:

Political instability in oil-producing regions influenced by fuel prices, infrastructure maintenance, or geopolitical events leads to delay in transportation. It then results in fluctuations in transportation costs from production sites to refineries and distribution points, there by increase in additional expenses.

6. Market Trading and Taxes:

Market trading, especially in the general market, adds another factor to increase in gas price. Speculators investing on future price movements can create a short-term fluctuation in prices.

Taxes, both regional and federal, and further region differences can impact gas prices, leading to variations across different cities in Canada. Additionally, refining and marketing costs contribute to the final price at the pump.

Current and future Gas Prices In Canada

The current price stands at CAD 1.44/litre. If the price increases by 2.5%, then it can lead to upto CAD 1.50/litre in the coming days. However, the figures are just based on the trending news and government is yet to announce the prices. Moreover, experts believe that the prices may decrease at the end of 2nd quarter if the global economy becomes somewhat stable.

History Of Gas Prices in Canada So far

Year Average Gasoline Price (USD/Liter)
1990 $0.41
1991 $0.44
1992 $0.47
1993 $0.50
1994 $0.54
1995 $0.57
1996 $0.61
1997 $0.64
1998 $0.41
1999 $0.54
2000 $0.67
2001 $0.76
2002 $0.80
2003 $0.85
2004 $0.91
2005 $1.00
2006 $1.05
2007 $1.12
2008 $1.31
2009 $1.02
2010 $1.09
2011 $1.24
2012 $1.27
2013 $1.29
2014 $1.25
2015 $0.99
2016 $0.90
2017 $1.05
2018 $1.20
2019 $1.25
2020 $1.18
2021 $1.38
2022 $1.59
2023 $1.12

How can higher gas prices in Canada affect investments?

Inflation: High prices for consumer goods and rare items due to increase in transportation costs.

Consumer Expenses: Consumer may spend fewer on other goods and services, leading to decrease in stock prices for companies involved in travel, retail, and fashion etc.

Bank Polices and Interest Rates: Banks consider inflation and economic growth while adjusting interest rates and can lead to potential rate hikes and their impact on various asset classes.

Energy Sector Investments: Demand renewable energy sources may grow. Sectors like solar, wind, and electric companies can benefit from the shift to renewable energy sources.

Real Estate Market: Areas with good public transportation or nearby to workplaces may become more costlier, impacting real estate values.

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