Gas prices in GTA plunge to lowest in months; another drop expected Friday

Gas prices in the GTA have fallen to a level not seen in months following a 12 cent drop at midnight on Thursday.

The average price of a litre of gas is now $1.79 at most stations – the lowest its been since mid-April – and indications are the price will fall even further on Friday.

Roger McKnight, Chief Petroleum Analyst at En-Pro, tells CityNews the average price will fall another three cents to 176.9 cents/litre at most stations.

While the falling price is good short term news for consumers, it may come with a cost of a different kind down the road. McKnight says the cheaper price can be attributed to the speculation of an economic recession that many experts suggest is just around the corner.

“That’s a pretty astronomical drop,” he says. “I guess it’s a glass half full, half empty. A bit of relief, but check your rearview mirror because a recession is about to bump you in the rear.”

Central banks around the world are hiking interest rates in an effort to cool inflation with investors worried of the recession.

McKnight says he expects prices to continue to trend down in coming weeks based on the slowing demand for jet fuel, gasoline, and diesel. The price of oil has fell by almost $10 in the past two days.

“From the supply, it looks okay, from the demand, it’s falling off. Prices should continue to fall.”

Fuel prices rose five cents on Wednesday and McKnight noted that while wholesale prices in Canada did not change due to the Canada Day holiday, it changed in the U.S. and would trickle down to Canada this week, leading to a brief rise in prices.

Prices in the GTA peaked at 214.9 cents/litre in June and the lowest price so far this year was in February, when it was costing drivers 161.9 cents/litre at most stations.

Six-month cut to Ontario gas and fuel tax in effect

The Ford government implemented a cut of the gas tax by 5.7 cents per lite on July 1 and prices dropped 11 cents on that day.

McKnight says the Canada Day drop was a direct result of the gas tax cut and a decline in wholesale prices. The falling price could also be attributed to an increase in the U.S. inventory and a slowdown in the demand for gas, diesel, and jet fuel south of the border.

The newly implemented cut tax is expected to continue to offer some relief to consumers but experts have said the impact may fluctuate due to external factors.

Ford has said he would consider an extension of the gas tax cut if inflation remains high. He has said the cut to the gas tax and the elimination of licence plate renewal fees would save a household, which owns a vehicle, around $465 this year.

The legislation that passed this spring also saw the fuel tax, which covers diesel, cut by 5.3 cents per litre over the same period.

Starting this month, Ontarians will be getting more money from the federal government’s carbon-price rebate cheques to help with the price of gas.

The payments will come quarterly, and the first cheques for this year will be a double payment for two quarters in July, followed by quarterly payments in September and January 2023.

With files from Lucas Casaletto of CityNews and The Canadian Press

Visit CityNews daily for updates on gas prices across the GTA