Gas Prices to Surge to $2/Litre Amidst Middle East Crisis
Quebecers are bracing for a significant increase in fuel costs, with gas prices expected to reach $2 per litre in the coming days. This surge is directly linked to escalating tensions in the Middle East, impacting both wallets at the gas pump and grocery bills.
“This represents a 25 to 30% decrease in my income. I have to work more and cut back on my expenses,” laments Bouzid Essakhi, a Montreal resident, while filling up his tank. As an Uber driver, he relies heavily on his vehicle for work. “Trump is making mistakes and I’m suffering the consequences,” he adds, frustrated.
On Saturday morning, Essakhi paid $1.889 per litre at a gas station in the Saint-Michel neighbourhood.
“Worst Nightmare” for the Oil Market
Following attacks by the United States and Israel in the Middle East, Iran has blocked the Strait of Hormuz, a critical waterway through which 20% of the world’s oil supply passes. “This is the worst nightmare the oil market has experienced in years. We are facing the physical interruption of the export of 20 million barrels of oil per day,” explains Yvan Cliche, an energy specialist at the Centre d’études et de recherches internationales at the University of Montreal.
According to the expert, 25% of Quebec’s oil is imported from outside of Canada, primarily from the North American market. While Asia, a major market for Gulf countries, is experiencing the most significant supply issues, the global nature of oil pricing means prices are rising across the province.
“Gas stations are free to set their prices, but some taxes vary from region to region,” explains Nicolas Ryan, Director of Public Affairs at CAA Quebec.
Regional Price Variations
This explains the price differences across Quebec. Prices were lower in Quebec City, at $1.73 per litre.
“It’s definitely an extra expense, putting pressure on budgets,” says Sophie Victor, a Quebec City resident, who filled up her tank anticipating further price increases elsewhere in the province.
“I’m shocked, but I have no choice but to drive to work. Public transportation would take too long,” says Stan Michel, a Montreal father who commutes to the South Shore. He anticipates further shocks, as Yvan Cliche predicts the price per litre will reach $2 in the coming days – a level not seen since Russia’s invasion of Ukraine.
Impact on Grocery Costs
The disruption isn’t limited to oil. Nitrogen fertilizers, essential for agricultural production in Quebec, are also being affected. “Before 2022, nitrate and urea [fertilizers] came from Russia. Plan B was the Gulf countries,” explains Martin Caron, President General of the Union des producteurs agricoles. The blockage of the Strait of Hormuz is already impacting the prices of these products, which have increased by 10 to 20%, according to Caron.
As a result, grocery prices, already a burden for Quebec families, are expected to continue to rise. For more information on global oil markets, see the U.S. Energy Information Administration.
