Gasoline prices might fluctuate a lot this summer. Roger McKnight, chief petroleum analyst with En-Pro International, explains that refinery capacities, factors in the market and geopolitics are essential drivers. That’s because refineries are operating at about 90 percent capacity, almost unheard of for this season. With the summer driving season around the corner, consumers could face erratic pricing at the pump.
Uncertain Price Outlook for Summer Driving Season
Historically, gasoline prices increase in the months leading up to mid-April, right before summer driving season begins and prices tend to peak. This year, multiple factors are making the price outlook murky. Refineries generally go through maintenance during January and February to switch over to summer fuel production, which can affect supply levels. McKnight noted that the current operational capacity of refineries isn’t normal for this time of year.
Over the last several weeks, West Texas Intermediate (WTI) has been the center of discussion as it pertains to light oil in the U.S. It has always been around the US$60-per-barrel level. This price is about US$10 less than it was six months ago. Although this drop would normally indicate a decrease in the cost of fuel, the story is different and still developing.
Adding to the complexity, Prime Minister Mark Carney eliminated the federal consumer carbon levy on April 1, which had previously added 17.6 cents per liter to gasoline prices. After this increase, our average pump price is some 15 cents per litre lower than it was prior. McKnight cautioned consumers against expecting prices to plummet too much more.
Potential for Higher Prices Throughout Summer
“That may support higher prices throughout the summer, but I can’t see anything drastic happening unless there is a geopolitical mess that we can never get out of.” – Roger McKnight
Prices typically settle as the May long weekend approaches in anticipation of the summer driving season. That said, McKnight noted that these higher prices are likely to hold over through the summer. The analyst warned that if refining margins are “so bad” that some refiners decide to cut back production, …
“The driving season is right around the corner, but the refining margins are so, so poor that the refiner is saying, ‘Heck, we’re just going to hold back … if we are not making good money on the stuff we’re making.'” – Roger McKnight
Additionally, outside factors—especially statements from U.S. President Donald Trump about tariffs and other geopolitical developments—have the potential to affect market stability. McKnight referred to this uncertainty as the “Trump factor.” He warned that it could skew any reasonable forecasts of fuel price.
“We have another factor in the equation that’s called the Trump factor, which has thrown any logical mathematical explanation completely out the window because it really depends on what he says, what we think he’s going to say or what he may never say.” – Roger McKnight
What The Author Thinks
The combination of fluctuating refinery capacities, geopolitical uncertainty, and unpredictable political factors like the “Trump factor” makes it nearly impossible to forecast gasoline prices with any certainty this summer. While there may be some relief due to the carbon levy removal, the overall picture remains murky, leaving consumers bracing for higher costs at the pump.
Featured image credit: PickPik
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