Colleen Cosgrove speaks with Roger McKnight about declining gas prices
Gas drops by 5.3 cents a litre
October 23, 2012 – 4:30pm By COLLEEN COSGROVE Business Reporter
Nova Scotia’s Utility and Review Board announced Tuesday it will change the price of gas early this week, leading one analyst to predict the price at the pumps will go down. (TED PRITCHARD / Staff)
Gas prices were down 5.3 cents per litre at the pumps this morning, after Nova Scotia’s regulator announced late Tuesday afternoon that its interrupter clause would be invoked at midnight.
The price for a litre of regular gas in Halifax is now $1.25.
“Consumers and resellers will see a change in price first thing Wednesday morning,” Paul Allen, executive director of the Nova Scotia Utility and Review Board said Tuesday. “Which way that will be (whether up or down), I can’t say.”
The little-used interrupter clause is employed when the daily market price for refined gasoline on the New York Mercantile Exchange makes a persistent six- to eight-cent swing before the review board sets the weekly gas price, which normally takes effect at midnight Thursday night.
The interrupter was last employed on Sept. 20, when the price dropped six cents overnight. Before that, it was used on May 18 and May 7 of last year.
Roger McKnight, a senior petroleum adviser for En-Pro International of Oshawa, Ont., says the writing was on the wall this week — the price would be coming down.
“Gas prices in Ontario have been dropping like a stone, and typically Nova Scotia lags a bit and then does the same,” McKnight said Tuesday. “I expect it to be quite drastic … a three-cent drop is drastic.”
The price of gas in Ontario and Eastern Canada is falling from the artificially high levels still lingering from the summer, McKnight said.
The high prices were largely caused by speculation that problems at refineries in Chicago and Detroit would mean a gas shortage this summer.
“Now those refineries are back on stream and the prices are dropping,” McKnight said. “Speculators were saying there was going to be a shortage, so therefore they jack up the futures prices or the New York Mercantile Exchange that the Nova Scotia regulator follows.”
As of Tuesday evening, regular self-serve gas in Halifax cost $1.303 per litre.
Market changes in the price of diesel fuel were not sufficient to warrant employing the interrupter clause.
In addition to the change that consumers will see this morning, the regular weekly price will still be unveiled at midnight Thursday.
(ccosgrove@herald.ca)