Fuel prices drop this weekend, but increase predicted Wednesday

Drivers filling up their tanks today may have noticed a significant drop in gas prices, with rates falling by about 13 cents per litre.

Analysts suggest prices should continue to fall slightly over the weekend as U.S.-Iran peace talks take place in Pakistan. However, experts warn the reprieve at the pumps is not expected to last.

The average price of gas today sat around $1.73 per litre, while diesel prices ranged between $2 and $2.10. While these figures offer a break from recent highs, costs are expected to climb again this Wednesday.

“Two things happen on Wednesday,” said industry analyst Dan McTeague. “Markets will react on Monday to what we see this weekend, and we have on Wednesday the beginning of what is the summer driving season.”

The start of the summer driving season traditionally triggers a price hike as gas stations switch to a “summer blend.” This version of the fuel is more expensive to produce because it is a more complex mixture designed to reduce evaporation and smog during warmer months.

McTeague noted that drivers could see increases of as much as six cents a litre.

“It’s completely unrelated to the war in Iran,” McTeague said. “But it does have to do with what we’ve been doing every year, semi-annually — winter to summer, summer to winter.”

The rise of the summer blend could be further compounded by the outcome of negotiations in Pakistan, where a United States delegation is meeting with Iranian officials to negotiate a ceasefire.

The conflict has caused gas prices to spike globally as tankers struggle to navigate the Strait of Hormuz, a narrow waterway in the Middle East that’s used to ship 20 per cent of the world’s oil before the war began.

“We’re going to look at a situation where we have gasoline basically staying at $1.739 in the morning. And by the looks of it, Sunday isn’t going to be that crazy either,” McTeague said. “Markets haven’t settled, but it’s clear that they’re all waiting for any type of signal coming from the negotiations on the ceasefire.”

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At home, gas remains around $1.73, diesel has also dropped from approximately $2.28 to the $2 to $2.10 range. McTeague warned that any stations charging above that range for diesel are taking advantage of consumers.

“Gas stations right now, be warned — this amounts to taking advantage of consumers. That price should be down to the $2.05, $2.07 range — no more than that,” said McTeague.

“They’re astronomical,” one resident said while filling up. “My husband and I have an e-vehicle and this — we’re using the e-vehicle a lot more.”

Another driver noted that the current costs “leave you a little speechless,” adding that the prices are “definitely hurting the pockets.”

Experts predict that the high cost of diesel will lead to the price of items like groceries and clothes going up.

The President of the Motor Truck Council of Canada told The Canadian Press that a trip from Toronto to Montreal could cost about $300 more.

Produce, meat and dairy are also expected to see an increase in costs.

Industry groups say retailers can only absorb so much of the increase and will ultimately have to pass off the added cost to consumers.

Gas prices have jumped by about 50 cents since the U.S.-Israel backed attack on Iran on Feb. 28.

An additional increase of about 10 cents is expected on April 15, when pumps switch from Winter to Summer gas.

WATCH MORE: Tensions persist despite ceasefire between U.S., Iran and Israel