As a year which saw gas prices hit “nauseating levels” nears its end, analysts say fuel costs in Windsor have not been this low since the very start of the year.
Amid rising inflation rates and an ongoing conflict between Russia and Ukraine, gas prices across the country this year hit levels never before seen by drivers. Back in March, gas prices topped a national average of $2.00 per liter.
But, in recent weeks, drivers may have noticed gas prices starting to cool down. On Friday around 12 pm, the lowest gas price in Windsor was recorded at $1.32, with most other stations in the city sitting around $1.35. According to GasBuddy’s head of petroleum analysis, the last time gas prices in Windsor were this low was Jan 3.
“Prices have been plummeting. They’re down almost 30 cents just in the last month … The good news is that we could continue to see a little bit more of a decline,” said Patrick De Haan, adding prices could drop another 15 cents before the end of 2022.
According to De Haan, much of the decline is attributed to the plummeting price of oil. Less oil is being consumed, he said, due to COVID-19 and “China locking down their economy. Another reason is due to the holiday season traditionally being a time when North Americans consume less gasoline.
“In addition, refineries have basically finished up seasonal maintenance. That’s really helped boost supply in the last couple of weeks, which brings prices down,” said De Haan. “We also have our own economic concerns to worry about with central banks, essentially raising interest rates to slow growth down and that is reducing consumption as well.”
It’s difficult to say exactly when gas prices may start to rise again since it’s unclear when China will reopen its economy and how oil markets will respond.
“Keep in mind things like OPEC production could rise into the equation as well. OPEC already had cut production at its November meeting. They certainly could cut production in the future if the price of oil continues to be under pressure. So it’s a little murky on where we’ll go.”
De Haan said prices “generally” rise around late February and March — but he’s hopeful prices do not reach record highs as they did in 2022.
“But again, there’s a lot of uncertainty around COVID in China, Russia’s war in Ukraine and consumer demand. All of these are just very uncertain at this time, given the global uncertainty over so many high-level issues that could push oil prices up or down.”