Fear of gas price hike looms during Ukrainian crisis

by | Mar 3, 2014 | News

Colorful Old Oil Barrels. Photo taken by Lars Christopher Nøttaasen.

Colorful Old Oil Barrels. Photo taken by Lars Christopher Nøttaasen.

Worries of a hike in gas prices are rising as Russia prepares to face off with Ukraine in Crimea.

Russia, in an act it says is aimed at ensuring the safety of its citizens, has promised military presence in Ukraine, much to the dismay of other nations. U.S. President Barack Obama asked Vladimir Putin to avoid military action in Ukraine.

If sanctions were imposed on Russia,Putin could respond by halting the production and exporting of oil and gas throughout Europe.

Roger Mcknight, senior petroleum analyst with En-Pro International, told Humber News there would be a rise in the cost of gasoline in Canada if Russia were to stop exporting crude oil throughout Europe.

“Brent crude is normally the benchmark for European or non-North American crude, and that type of crude is used in refineries east of the Ohio Valley,” McKnight said.

He said that prices for a barrel of crude oil have surged to two dollars.

“Gasoline could go up 1.2 cents by tomorrow,” McKnight said.

The strength of the Canadian dollar is another huge factor in what seems to be an inevitable gas hike.

“If the Canadian dollar keeps dropping like it has recently, then the price changes you’re going to see over the next couple of days could be more.”

David Brown, a natural gas broker from One Exchange Corp. based in Calgary, told Humber News there wouldn’t be an immediate reaction in North America if there were a halt in crude exportation in Russia.

“Right now natural gas is pretty much a localized market. We’ve got North American production, North American pipelines, and very little is going offshore.”

“What happens with production issues in the Middle East or Russia or anyone else outside of North America really doesn’t have an effect on us at this point and time.”

Humber News caught up with 2nd year paralegal student Laura Munro to see how she would prepare in the event of a hike in gas price:

The Canadian Automobile Association has several tips for Canadian drivers to save on fuel energy.

  • Drive at moderate speeds and avoid stopping aggressively
  • Travel lightly, avoid carrying extra luggage
  • Reduce use of services that drain power
  • Use a block heater during the winter to reduce time warming the car
  • Check out fluid levels
  • Check for possible leaks