The cost of gas has spiked almost 5 cents per liter across most of Newfoundland and Labrador on Thursday, as pump prices were just a cent away from setting a new record.
Thursday’s increase is the 14 successive weekly rise.
The Public Utilities Board, which regulates fuel prices in N.L, permitted retailers to increase the price of fuel by 4.8 cents per liter.
The adjustment means that the most of that a gas station can charge for a litre of self-service unleaded fuel on the Avalon Peninsula is now $1.482.
The record for gas in the province was set in July 2008, when a liter of fuel was sold for as high as $1.493.
Fuel prices on the Avalon Peninsula are generally among the lowest in N.L. Retailers in other pricing regions are allowed to charge extra, to permit for transport and other expenses.
Larry Short, a St. John’s financial advisor, says the major force behind increasing prices is not the price of oil but a sudden change in currency exchange from 2008 to date.
“If you remember back to 2008, the Canadian dollar was trading at $1.10 to the U.S. dollar, whereas today is trading 80 cents to the U.S. dollar,” said Short.
“That difference … means that if the Canadian dollar today was at a dollar 10, the price of gas would be about $1.01,” he said. “There are other factors at play here, but that’s the single biggest factor [is] how much we have to pay per U.S. dollar.”
Short added that his reading of commodity news suggests that higher gas prices could be likely in the coming months.
“There’s actually further discussion that by some other oil forecasters that we could actually get a spike up to $100 a barrel [for crude],” Short told The St. John’s Morning Show.
“So more than likely, we will see higher gas prices before we see the Canadian dollar move up quite significantly to make a big, big difference.”
In the meantime, the PUB permitted a rise of 0.7 cents a liter for diesel. Furnace oil rose by 0.67 cents a liter.