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NWT gas prices shoot up this week

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Kiera Nolting fills up at the Shell Station on Range Lake Road. With high gas prices, Nolting is trying to drive her vehicle less, but she uses it for her commute to work. Sidney Cohen/NNSL photo

Northwest Territories gas prices shot upwards in the past week 24.3 cents to an average of 145.8 cents per litre, according to national gasoline price tracker, Gas Buddy.

On Aug. 6, Gas Buddy's survey of 17 gas stations in the territory found gas prices were 24.3 cents higher than than a year ago and 24.3 cents higher than one month ago.

Kiera Nolting fills up at the Shell Station on Range Lake Road. With high gas prices, Nolting is trying to drive her vehicle less, but she uses it for her commute to work.
Sidney Cohen/NNSL photo

That contrasts to a national drop of two cents per litre in the past week to an average of 131.26 cents per litre.

NWT gas prices on Aug. 6 have varied dramatically over the last five years, said Gas Buddy, ranging from 115.9 cents a litre in 2016 to 141.9 cents in 2014.

Dan McTeague, a senior petroleum analyst at Gas Buddy, told Yellowknifer the sharp increase in NWT gas prices reflects a delayed reaction by retailers who are finally recognizing that wholesale gas prices in Canada have gone up and are likely to stay up for the foreseeable future.

“Gasoline has seen a price increase across much of western Canada ... there's been a lot of volatility and it's more a time when many gas stations in Yellowknife realize that they're going to have to throw the towel in and eventually recoup some of the costs of getting gasoline and delivering it to Yellowknife,” said McTeague.

The difference between the wholesale cost of gasoline and the price at the pumps in NWT is about 18 cents a litre, which is not that different from the retail margins in places like Calgary, Edmonton, Regina and Winnipeg, said McTeague.

He noted the cost of transportation of fuel to the North is between three and five cents per litre.

At $1.46 per litre, price of gas in NWT may seem steep, but prices are higher in Montreal and Vancouver, said McTeague.

“Considering the distance and proximity to infrastructure for gasoline and for oil, I'm not surprised to see these prices, but they are certainly a correction in terms of what everyone else has had to pay,” said McTeague.

While pumping gas at the Shell Station yesterday on Range Lake Road, Keira Nolting commented that recent gas prices are “ridiculous.”

“I used to go driving around for fun but now it's like, why would I when the cost is $1.44 now, it's just not something I'm interested in,” she said.

She is not looking forward to a carbon tax, which will add 4.7 cents to the price of a litre of gasoline in 2019, and rise each year until it hits 11.7 cents per litre in in 2022.

Nolting relies on her vehicle to get to and from work and fills up her tank about once every week and a half.

“That's like $80 each time,” she said.

“There's not much you can do up here,” she added. “The buses sure, but they run once every hour.”

McTeague conceded that 2018 has been an “unusual year” for gas prices.

He said oil is up $25 a barrel compared with this time last year, and that production of gasoline has been “severely challenged” in western Canada.

Suncor, an oil refinery in northern Alberta, was down for a few weeks for maintenance in June, which created a gasoline shortage and pushed prices higher than expected, said McTeague.

“Pretty much everywhere from the B.C. interior all the way out to Thunder Bay, Ontario saw rotational gas shortages at Petro-Can and some Shell stations back in early July, late June,” he said.

Changes in trade between the United States and China, uncertainty surrounding the North American Free Trade Agreement (NAFTA), rising global demand for fuel and concern over reduced output from countries like Venezuela and Iran have all contributed to higher prices at the pumps.

On Monday, the U.S. reimposed sanctions on Iran, a move that was anticipated after the U.S. withdrew in May from the Iran nuclear deal.

“(Iran's) production may be affected, meaning there will be less oil available in the world,” said McTeague.

“The higher prices we're seeing now are here at least for the foreseeable future.”