Gas prices jump in Saskatoon as refineries scale down

The days of cheap fill-ups might be coming to an end in Saskatoon after gasoline prices started to jump 15 cents per litre on Tuesday.

By 4 p.m., several Esso, Shell and Petro-Canada gas stations had settled at 79.9 cents per litre along 8th Street, up from the 64.9 most stations were sticking around for several weeks.

The new price range came about after two Esso stations raised prices by 20 cents to start the day, as some drivers spotted 84.9 cents per litre in the morning hours. Shell then raised their own prices to 79.9, where Esso eventually settled.

Enpro Chief Petroleum Analyst Roger McKnight told 650 CKOM in an interview that with prices stuck at a lower point for an extended period of time, Esso wanted to “signal” to other stations what they thought a fairer price would be.

“It looks like we had a price war going on and somebody, I suspect it was Esso, said ‘enough is enough,'” he said.

He noted that if no other gas stations had followed Esso’s lead, then the price war at the lower price point would have resumed.

While oil prices are in the basement, with West Texas Intermediate ending the trading day at $12.34 a barrel, that doesn’t necessarily mean gas prices will continue to fall.

With low demand due to reduced travel during the COVID-19 pandemic, some refineries are reducing their output of gasoline while others in the U.S. are shutting down production.

McKnight said that reduced supply could lead to increases at the pump, though it’ll still be cheaper than during any other spring in recent memory.

“I can’t see prices accelerating anywhere near where they should be,” he said, adding in his experience late April and early May usually feature the most expensive gas prices.

The veteran analyst said prices won’t rise significantly more until either COVID-19 dies down or oil companies decide they’re going to cease pulling oil out of the ground during the pandemic.