If gas prices stay at their current low levels, a new report suggests, Canadian drivers could save a combined $12 million this year.
That works out to about $1,200 per household, according to the report issued in December by CIBC World Markets
“Even if oil rebounds … consumers should benefit around $10 billion,” CIBC economist Nick Exarhos told CTV News Channel.
The low gas prices are being driven by low prices for crude oil, which have fallen due to a decline in demand.
“It’s a race toward product that no one wants and for which demand is simply not there. The only thing that can give is price,” said industry analyst Dan McTeague.
Oil prices have fallen below US$60 per barrel, and with OPEC refusing to cut production, experts believe an increase isn’t likely in the near future.
Still, the assumption that gas prices will stay low remains a significant assumption, Exarhos said – calling low prices a “self-defeating” phenomenon which often cause demand to rise.
At the beginning of 2014, gas prices in many parts of Canada were 35 to 40 cents higher than their current values.
According to McTeague, it may yet be several months before lower gas prices – if they continue – translate to savings on other products and services due to industry practices.
“By early spring, we should notice a significant savings in pretty much everything that has any connection to oil and gasoline,” he said.
As of 5 p.m. Friday, many gas stations in Cambridge were reporting prices below 90 cents per litre, although Kitchener and Waterloo’s retailers had yet to break that barrier.
With files from CTVNews.ca
