Motorists were rubbing their eyes in disbelief on Tuesday as the prices at the pumps came falling down by as much as a dime at some gas stations.
Pump prices at a gas station are seen in Toronto on Tuesday, July 17, 2007.
The average price paid across Canada for a litre of gas this week was about $1.06, a four-cent drop from last week, according to Calgary-based fuel monitoring firm M.J. Ervin.
A look at prices across the country:
In Montreal, prices fell about six cents a litre to $1.09 from last week, according to M.J. Ervin's weekly national gas price survey.
In Toronto, prices fell more than seven cents a litre to 97.5 cents from last week, the firm reported. Meanwhile, user-generated pump-watching website
www.gasbuddy.com reported gas prices were as low as 96.9 cents per litre in Canada's largest city, marking the first time a litre of gas has fallen below a loonie a litre.
In Vancouver, drivers reported prices Tuesday ranging from about $1.04 to $1.06, down from $1.12 to $1.14 on Monday.
Across Nova Scotia, where the gasoline retailing industry is regulated, prices dropped to a reported low of $1.13 from about $1.18 to $1.21 one day earlier.
In oil-rich Calgary, prices rose nearly seven cents to about $1.13 a litre, M.J. Ervin reported on Tuesday. On Tuesday, big name retailers were selling gas at just under $1.16 a litre, but smaller outlets offered fuel at $1.06.
And in Winnipeg, M.J. Ervin reported that prices rose about five cents to about $1.14 this week.
Prices at the pumps have plummeted as much as 10 cents a litre in some markets.
Jason Toews, founder of gasbuddy.com, believes the lower prices are stabilizing but that this phase is likely a short-lived one.
Rising global oil prices and increasing gasoline demand push prices higher over the summer driving season, he told The Canadian Press.
"I expect this to be a temporary bump, and that we'll see a return of high prices,'' said Toews, who has been studying gasoline trends since 2000, and operates his North American monitor website out of Minneapolis, Minn.
The falling prices have come amid increased capacity at North American inventories, as well as cheaper gas imports because of the soaring Canadian dollar.
One industry observer noted Canada responds to the North American market, which is driven by the United States and traders on the New York Mercantile Exchange.
"Canadians are not price makers,'' said Faith Goodman, with the Canadian Petroleum Products Institute. "Our market has to be in equilibrium with the U.S.''
Goodman told CP that pump prices reflect international oil and local retail competition.
"I don't think anybody can predict the price of gasoline because there are so many conflicting components to it.''
Tony Macerollo, Canadian Petroleum Products Institute vice-president of public and government affairs, said the falling prices were a "good example" of the free market in operation.
"When there is downward pressure on prices, there is usually some sense there is an increase in supply out there ... again it's a North American marketplace not a uniquely Canadian one," Macerollo told CTV.ca from Ottawa.
"Those savings, as result of market conditions, will be passed on to consumers."
Meanwhile, prices at the pumps dropped a cent a U.S. gallon south of the border in the United States.
The drop came after a futures market that has plunged nearly 25 cents a gallon over the past four days.
The falling prices came amid news of growing inventories and that refineries would be returning to service.
Meanwhile, world oil prices rose amid concerns of disruptions in supplies of the light, sweet crude most in demand by those refineries as they ramp up their operations to increase output.
Washington is to release a weekly report on fuel inventories on Wednesday.
Industry watchers have forecasted crude stocks will have plunged by an average 760,000 barrels in the week ending July 13.
With files from The Canadian Press
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Originally Posted by DonJuan
