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Gasoline prices on the rise

Gasoline prices on the rise

Posted on: 4/25/2018 | Author: ATB Financial's Economics + Research Team

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With the late snow and the lack of play-off hockey in Alberta, citizens of this province have been a bit grumbly lately. Add in high gasoline prices, and there's more than a few people irked. And while we seem to notice the increases more than the decreases, it’s generally true that gas prices have tended to outpace overall inflation.

The graph below shows price trends for the all-items consumer price index (the red line) compared to that for retail gasoline (the blue line).

Since 2002, the reference year in which Statistics Canada set the index of prices equal to 100, the consumer price index in Alberta for all items has risen to 139.9. That is, overall prices have risen nearly 40 per cent. The gasoline price index, however, is currently at 175.1, meaning prices have increased by 75 per cent over the same period.

Gas prices tend to be much more volatile than most other prices, as illustrated by the jaggedness of the blue line. At times, gas price decreases pushed the blue line well below that of the red line, only to come roaring back above in short order. The price of crude oil -- which has been on the rise lately -- is one factor that affects prices. Other factors such as refining capacity, transportation costs and consumer demand will also affect the price at the pump.

However, Albertans can stop grumbling about a couple of things. For now, the snow has gone, the temperature is warm, and at least the Winnipeg Jets are advancing in the playoffs. But we can keep right on grumbling about gas prices--they’ve been rising even higher so far in April.

Gasoline prices, graph​​​​​

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