The Greater Toronto Area’s (GTA) gas prices have fallen significantly, which have not been seen in months following a 12-cent drop last Thursday at midnight.
The average price of a liter of gas now stands at CA$1.79 in most stations, the lowest it has been since mid-April. Indications suggest it may have fallen even further on Friday, according to a report.
En-Pro Chief Petroleum Analyst Roger McKnight said the average price would drop another three cents to 176.9 cents/liter.
The recent low prices can be seen as a good sign for consumers in the short term, but it may hold another kind of consequence down the road. McKnight said the cheaper price could be attributed to the speculation of an economic recession, which many experts believe is around the corner.
“That’s a pretty astronomical drop,” he said. “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 worldwide are hiking interest rates to cool inflation, with investors worried about the recession.
McKnight said prices would keep trending down in the coming weeks based on the slowing demand for jet fuel, gasoline, and diesel.
He expects prices to continue to trend down in the coming weeks based on the slowing demand for jet fuel, gasoline, and diesel. Oil prices fell by almost CA$10 in the last 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 last Wednesday, and McKnight noted that while wholesale prices in Canada did not change due to the Canada Day holiday, they 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/liter in June and the lowest price so far this year was in February, when it was costing drivers 161.9 cents/liter 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 liter on July 1, and prices dropped 11 cents on that day.
McKnight said the Canada Day drop directly resulted from the gas tax cut and a decline in wholesale prices. The falling price could also be attributed to an increase in U.S. inventory and a slowdown in gas, diesel, and jet fuel demand south of the border.
The recently implemented tax cut is expected to provide some relief for consumers. However, experts have suggested the impact could change due to external influences.
Ford said he would consider extending the tax cut for gas if inflation stays high. He also said that the gas tax cut and the removal of renewal fees for license plates would save households with their own vehicle about CA$465 this year.
The legislation that passed this spring also saw the fuel tax, which covers diesel, cut by 5.3 cents per liter 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.
This article originally appeared on City News Everywhere.