Why gas prices are so high, and not expected to drop anytime soon

Alex Clerk stuck the nozzle of the gas pump in the tank of his Nissan X-Trail, squeezed the handle and watched the numbers on the pump fly by until it mercifully stopped.

That'll be $80.31, please.

"It's kind of a hit in the old wallet," he said. "It's more than you expect to pay for gas."

At $1.42 a litre, the minimum price for gas is the highest it's ever been on P.E.I., topping the previous high of $1.41 in May 2014. 

However, if you take inflation into account, the current price is far short of the all-time high. In July 2008, the price was $1.39, which with inflation would be $1.71 today. 

Nobody has to remind Kenny Snow, owner of Oyster Bed Esso. He's heard plenty of complaints from customers. 

"I feel for them, I got to put fuel in all my vehicles, too. But it's completely out of our hands."

IRAC regulates price

The Island Regulatory and Appeals Commission, or IRAC, regulates the price of gas on P.E.I., which Snow said keeps the price fair for all gas stations.

"If it wasn't regulated the same for everybody across the board, you could have people create price wars, which would serve no purpose other than to hurt a competition business."

Snow said there is a misconception that when the price of gas goes up, the gas stations make more money. 

"Actually the price of fuel increasing hurts our bottom line because we pay a percentage to credit card fees."

That's of little consolation to Clerk, who lives in Brackley. He said people like him who live in rural P.E.I. have few options for transportation other than their vehicles.

"You don't have much choice. It goes up and you have no control over it and you just pay the price if you want to travel around."

Higher in Ontario

The price of gas is similar in the other Atlantic provinces, and even higher in places like Ontario, where prices are as high as $1.48 a litre.

Gas price analyst Dan McTeague, president of Canadians for Affordable Energy, said the recent jump in the price of oil has translated into higher prices at the gas pumps. He said the Canadian dollar has not kept pace as it has in the past.

"When the Canadian dollar doesn't respond, and doesn't protect us, we wind up paying even more."

McTeague doesn't expect prices to drop anytime soon, and predicts gas may even rise to $1.47 a litre by Remembrance Day. 

The former Liberal MP said while everyone wants to eventually transition to green energy, it may be happening too fast. He said solar and wind energy can't yet replace the convenience and reliability of fossil fuels, adding Canada should scale back its goals of emissions reduction as some other countries have.

Time for 'dramatic reflection'

"This is a global energy crisis made worse by higher taxes on fuel, made worse by a lack of investment. Oil companies, gas companies can't get financing. We have banks around the world, including Canada, targeted by green organizations that are withholding financing to get more oil and natural gas out there to a market that is desperate to have more."

For consumers and policymakers, it's a time for "dramatic reflection," McTeague said.

"I think we're getting to the point where people are going to have to make some tough choices between what they need to do to get to work, what they need to do to keep their homes heated and what they need to do to keep food on the table."