Canadians drivers are once again fuming over a runup in pump prices before a long weekend. Across Canada, the average price of regular, unleaded gas hit $1.36.8 cents per litre this week, the highest level since Sept. 2008.
Here are five key reasons for the run-up:
1. Approach of summer driving season
2. Higher crude prices
3. A lower Canadian dollar
The dollar is off roughly 10 per cent against the U.S. dollar in the past year. Because crude prices are set in U.S. dollars, that means Canadian refiners are paying more for the oil, and importers have to pay more for their gasoline.
4. Lack of retail competition in Canada
5. U.S. exports of gasoline and diesel out of North America
U.S. refiners on the Gulf Coast have a distinct cost advantage - thanks to lower natural gas prices - over offshore competitors. Exports of petroleum products are up 25 per cent in the past year, creating tighter supply/demand conditions in North America.