Good News! Fuel Prices to Remain Stable

LONDON, ON — Retail diesel prices in Canada peaked in March before dropping the next month and remained consistent the rest of the second quarter, according to new report from the petroleum information services provider The Kent Group.

Trucking’s main fuel hit a national average of $1.189 per liter in the final month of the first quarter and then fell to $1.111 in April, while it has remained close to the price since, reflecting stagnant diesel demand.

The average price on July 7, just before this report was issued, was $1.117, down $0.223 from a year earlier.

According to the report, wholesale diesel prices fell more precipitously in eastern Canada, largely a result of a slower rise in crude prices and more pronounced seasonality tied to the regional prevalence of heating oil usage.

Also, wholesale diesel prices fell throughout most of Canada with the exception being the relatively isolated West Coast where continued U.S. refinery issues led to diesel supply concerns and wholesale prices that remained high throughout the last few months.

Typically, retail prices follow trends of wholesale prices but are naturally higher while the margin between the two can vary greatly at times.

Diesel prices are likely to stay flat as demand remains soft over the summer months, and inventory levels sit well above where they were at this time last year,” the report said.

Meantime, the Canadian average retail gasoline price steadily rose over the first half of 2015, reaching $1.207 per liter in June, after prices had bottomed out at $0.926 cents in January.

The average price on July 7 of $1.221, $0.151 less than during the same time in 2014.

Although gasoline prices typically rise in the spring, they remained relatively low, sitting below the five year historical average, according to the report.

“Summer is characteristically a period of strong demand for gasoline. Despite this, high refinery production rates have allowed gasoline stocks to stabilize at the high end of their normal historical range,” the report said. “It is likely that retail gasoline prices will begin to stabilize as we move further into the summer. Furthermore, as the seasonal demand cycle begins to wane in the early fall, prices are likely to soften, remaining well below levels seen a year ago.”



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