Get ready to pay 84 cents a litre for gas

www.canada.com Canadian Press Saturday, January 11, 2003

CALGARY -- Canadians should brace for wild price swings at the gasoline pump in the next few months, with a potential average fuel price of 84 cents a litre, says a new report from the TD Bank.

With the cost of gasoline linked closely to world oil prices, the social turmoil in Venezuela and ongoing threat of war in Iraq will likely lead to volatile price fluctuations, said TD senior economist Craig Alexander.

"A war with Iraq could push the national average price of gasoline up to 84 cents a litre or higher depending on how the conflict unfolds," Alexander said in his report.

Across Canada, the average price of regular gasoline this week was 76.3 cents a litre.

In Vancouver, many stations were selling regular fuel for 75.9 cents per litre.

"Conversely, a resumption of oil exports from Venezuela and an avoidance of a conflict with Iraq would likely see gas prices drop to 66 cents a litre or lower."

In a national survey released this week from Calgary-based MJ Ervin & Associates, Yellowknife logged the highest prices for regular gas at 91.9 cents per litre. Winnipeg was the lowest at 67.5 cents per litre.

The TD bank report warns that if the U.S. does attack Iraq before the Venezuela situation is resolved, oil prices go up to $40 to $50 US per barrel.

And using the rough calculation that each $1 US rise in the price of crude increases Canadian gasoline prices by about one cent, crude at $40 US would create an average pump price of 84 cents.

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