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As driving season nears, motorists shrug over higher gas prices

Mostafa Mahmood puts gas in his car in Montreal in April. High prices don't seem to have fazed Americans and Canadians planning their summer holidays.

Graham Hughes for The Globe and Mail/graham hughes The Globe and Mail

Canadian drivers appear undaunted by high pump prices as they gear up for the summer driving season that traditionally starts with this weekend's Memorial Day holiday in the U.S.

Tourism officials say Canadian and American vacationers don't appear to be letting high fuel costs put a crimp in their holiday plans, although they are making some changes, such as shortening the mileage and duration of their trips.

At least consumers can rest easy that pump prices won't top $1.60 a litre – as was widely predicted just a few months ago – thanks to the current plentiful supply of gasoline, coupled with weak growth in U.S. demand.

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That's small consolation, given the current near-record prices, but consumers have adjusted to higher gasoline costs, said Jason Toews, co-founder of, which provides data on the lowest-cost fuel sources in neighbourhoods across North America.

"Over the years, people have become desensitized to higher prices," Mr. Toews said. "We feel relieved they're at $1.28 rather than $1.60."

Consumers have told him they're buying more fuel-efficient vehicles or reducing their weekend driving rather than cutting holiday trips, Mr. Toews added.

At the Canadian Automobile Association office in Hamilton, vacationers are shortening the duration of their trips, staying on the eastern half of the continent, and going south across the border, where prices are lower.

"We're finding a lot of our customers are heading to the U.S.," said Patricia Marques, store manager at CAA's Hamilton Mountain location. "They've accepted the higher gas prices, but are looking to get the better breaks."

In the U.S., some 47 per cent of respondents to an American Automobile Association survey said higher gasoline prices would affect their holiday plans; they will either drive shorter distances or economize in other ways.

Still, the AAA said it expects a 1.2-per-cent increase in the number of Americans driving more than 80 kilometres on the Memorial Day weekend, compared to the same holiday weekend in 2011.

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Unlike the U.S., where demand for petroleum products has been stagnant under the twin pressures of higher prices and a weak economy, Canada gasoline consumption has risen an average of 1 per cent per year in the past four years, though that growth slowed somewhat in the first three months of 2012.

Heading into the weekend, Canadian pump prices averaged $1.285 per litre, down from a peak of $1.367 in mid-April. That's 1.3 cents higher than the average price in the third week of May last year, and about 4 cents off the peak of 2008.

In the U.S., gasoline prices have fallen for seven straight weeks to $3.71 (U.S.) per gallon from $3.94 in early April.

Gasoline and diesel have followed crude prices lower since early spring, as an easing in tensions with the Iran, signs of recession in Europe and slower growth in China have taken the steam out of the market.

At the same time, fears about tight supplies in the wholesale gasoline market have evaporated. Analysts feared the closing of some East Coast refineries would result in shortages, but some that had been slated to close are now staying open, and there is plenty of offshore product that could fill any gap.

The exception is the West Coast, where refinery shutdowns have driven prices to record-high levels in both the U.S. and Canada. Vancouver drivers on Friday faced pump prices of 1.49 a litre, the highest in the country.

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Even if oil costs continue to slide, there is a limit to how much pump prices will fall in the summer. With vacations and weekend getaways, North Americans consume 25-per-cent more gasoline in the summer months than in the winter. As a result, prices are consistently higher in the summer.

Oil companies are simply taking advantage of market forces to increase their profit margins, said Peter Boag, president of the Canadian Petroleum Products Institute, which represents Canadian refiners.

"That's why gasoline is more expensive in the summer," Mr. Boag said "It's for the same reason that it is more expensive to go on a Caribbean vacation in the winter than in the summer – because that's when people want to go."



These days high gasoline prices appear to be inevitable, something to complain about but almost impossible to avoid.

But the pain of high pump prices can be lessened, even in the summer when Canadians are making weekend trips to the lake or embarking on cross-country driving holidays.

There are the obvious ways to economize: walk, bike or bus to work; purchase cars with better gas mileage; plan your errands so you are covering the same ground only once.

Short of those lifestyle changes, there are a few other options for the smart motorist to save on gas and money:

* Darting in and out of bumper-to-bumper traffic at 130 to 140 km/h may get you to the cottage a little faster, but it will cost you money. In its Auto$mart guide, Natural Resources Canada estimates that aggressive driving – speeding, hard stops, quick acceleration – can reduce fuel efficiency by 25 per cent.

* Keep tires your properly inflated and engine tuned. Under-inflated tires cause excessive tread wear and can reduce gas mileage by as much as 3.3 per cent, the U.S. Department of Energy says. Fixing a noticeably out-of-tune car can boost mileage by 4 per cent.

* Streamline your vehicle. Remove roof racks as quickly as possible, mount bike racks on the trunk rather than the roof, and reduce excess weight as much as possible. A loaded roof rack can reduce mileage by at least 5 per cent, and some tests indicate a 10- to 25-per-cent drop in mileage.

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

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