Todd Hirsch, Senior Economist, ATB Financial

The May long weekend is the kick-off to the summer travel season—and it’s often accompanied by an increase in the price of gas at the pump. Alberta gas prices may not have experienced the traditional Victoria Day bump this year, but they still outpaced general price inflation over the past ten years.

Calgary and Edmonton motorists paid just under $1.20 per litre in April. So far in May, prices have moderated a bit between $1.12 and $1.15. It’s a difference of a few pennies—but it gets noticed. Albertans are more aware of daily gasoline prices than almost any other item they buy as many of us fuel up a couple of times a week and because prices are displayed prominently on gas station signs throughout the province.

In the graph below, the green and blue lines represent the price per litre of gasoline in Calgary and Edmonton, respectively. Since 2002, prices have fluctuated wildly, often in line with the volatility of global oil prices. And it isn’t just our imagination: increases in gasoline prices have outpaced the prices of most other things we purchase.

The red line below represents what a litre of gas would cost if prices had risen at the same rate as Alberta’s all-item consumer price index (CPI). There have been only a few times where prices were below the CPI trend line, the most recent time in 2008 when global oil prices collapsed. If prices today were in line with the 10-year rate of inflation—Albertans would be paying about 84 cents a litre.