Toronto Gas Prices Could Soon Hit $2 Per Litre, Analyst Warns
Motorists in the Greater Toronto Area are bracing for a challenging spring as gas prices continue to climb, with analyst Dan McTeague warning that prices could soon reach $2 per litre. This potential milestone comes amid significant increases driven by geopolitical tensions in the Middle East.
Sharp Increases in Gas Prices
According to data from gaswizard.ca, average gas prices in Toronto have surged dramatically in recent weeks. In late February, prices were around $1.37 per litre, but by Monday, they had jumped to an average of $1.78 per litre. This represents an increase of 41 cents per litre in just one month.
McTeague provided specific figures: "We've seen an increase of about 38 cents a litre for gasoline and 68 cents per litre for diesel at this point, which means that prices have gone up at least a third on the gasoline front, and about 40% on the diesel front."
The price spikes have been particularly noticeable in recent weekends. For instance, prices jumped 10 cents per litre from $1.59 to $1.69 on March 15, followed by another 4-cent increase the following Monday.
Geopolitical Factors Driving the Surge
The primary driver behind these price increases is turmoil in the Middle East, specifically related to Iranian actions in the Strait of Hormuz. This narrow but vital waterway connects the Persian Gulf with the Arabian Sea and handles approximately 5% of the world's oil tanker traffic.
Israeli and U.S. military operations targeting Iran's regime have contributed to global oil price increases. In response, Iran has blockaded the Strait of Hormuz and attacked oil tankers with drones. U.S. President Donald Trump has issued an ultimatum to Iran to reopen the strait or face attacks on Iranian energy infrastructure, while Iran has threatened to mine the strait and attack more sites across the region.
Historical Context and Future Projections
The Greater Toronto Area hasn't seen gas prices this high since April 2024, when Ontario averaged $1.79 per litre. McTeague suggests that reaching $2 per litre is certainly possible given current trends.
He pointed to additional factors that could push prices higher, including the mid-April switch from winter to summer gasoline formulas, which typically adds about 10 cents per litre to pump prices.
Policy Implications and Economic Impact
McTeague also commented on the role of government policies in the current price situation. He noted that even without the main carbon tax of 20 cents per litre, the federal government's Clean Fuel Standard has already added 17 cents per litre.
"It's a damning indictment on the green policies of the past 10 years," McTeague said, "because it's the main reason why the Canadian dollar, the limping loonie, is no longer the petrol loonie."
Diesel prices continue to outpace gasoline, a trend that began in early March and has persisted throughout the month. This has significant implications for transportation costs and the broader economy.
As spring progresses, Toronto drivers will need to prepare for potentially record-breaking gas prices that could impact commuting costs, travel plans, and household budgets across the region.
