Gas prices are expected to drop soon, but geopolitical risks remain

Consumers across Canada may soon experience some relief at gas stations starting next week due to seasonal changes in refineries, though precise reductions remain uncertain as geopolitical risks persist, analysts say. Gas prices have surged since the U.S. and Israel initiated joint attacks on Iran at the end of February, with ongoing conflict keeping the Strait of Hormuz largely closed and responsible for transporting roughly a fifth of the world's oil daily.

As Canada transitions to winter gasoline blends, prices could begin to drop from September 16, coinciding with the arrival of cheaper winter fuel at retail pumps. Analyst Patrick De Haan from GasBuddy explains that demand for gasoline typically decreases during colder months, leading to lower prices. Winter gasoline blends are generally less expensive than those sold during warmer seasons due to the lower cost of butane, butane's impact on air pollution wanes as temperatures cool.

The average price of regular gasoline in Canada currently stands at approximately $1.77 per litre, slightly higher than last week's $1.75 and compared to $1.42 a year ago. De Haan suggests that without the ongoing geopolitical tensions and other economic factors influencing gas prices, seasonal changes usually result in a 5 to 20 cent per litre decrease.

For a 50-litre tank, this could translate to savings of around $10. However, the actual relief this year might be offset by new developments overseas, making it difficult to predict the final outcome based on the complex interplay of geopolitical tensions.