A senior petroleum analyst says gas prices are expected to fall in Nova Scotia after a dramatic jump last week.
Dan McTeague with Gasbuddy.com says gasoline should fall by at least 4-and-a-half cents per litre when the Utilities and Review Board makes its weekly change.
“For some latitude that the regulatory board gives itself, it looks like a 4.5 cent minimum, possibly 5 cents. It’s really on the cusp edge of what they would use as the Interrupter to provide you that decrease but since that hasn’t happened I have to assume that the decrease that will put us well below what I’m seeing here at most stations and I would suspect the following week we’ll see a similar decrease.”
McTeague says diesel is expected to drop by about two cents a litre this week.
He says refinery infrastructure in Texas that was damaged by Hurricane Harvey has been repaired and gas is flowing at a better rate.
“Most refineries in the U-S have restarted, the ones that were affected. There were 14 refineries. if you look at the Texas Gulf Coast, right up to Louisiana, more than half of the gasoline produced in the United States come from there. Half of that was sidelined because of Hurricane Harvey. When refineries are underwater, it means that every nut, every bolt, every pump every compressor has to be checked and greased and maintenance carried out. Another thing to keep in mind, the U-S Northeast, that is Washington, New York, Baltimore, Philadelphia, const the largest area of demand for petroleum products anywhere in the world. If there’s any type of tightness in supply you can bet we’re going to be impacted here in Nova Scotia but right across the world.”
“There was a major supply interruption in the U-S, almost a quarter of gasoline produced slumped or was not able to be produced. With Hurricane Harvey, a lot of that gasoline could not make it’s way back to the U-S Northeast market through something called the Colonial Pipeline. That means that states like Maine down towards New York, Washington and Baltimore were really short of fuel. That sent wholesale prices skyrocketing on the benchmark markets where the regulatory board here in Nova Scotia takes its cues. It did hold off for a few days of course until the inevitable, so we saw kind of an odd phenomenon last week where you had a price increase followed by the use of the Interrupter Clause which sent prices skyrocketing about 14 cents a litre. We’re now seeing a major climb-down since that, prices have started to drop by as much as 10-11 cents a litre but because in the way in which the Board uses the past several days to calculate it means that you won’t get all that decrease on the markets as quickly as they have in other parts of the country where there is no regulation.”
The URB sets prices at midnight.
