Montreal drivers have been paying noticeably more at the pump since this weekend. Experts say the war in Iran has shaken oil markets, sending shockwaves through global energy markets and pushing prices upward. Gas price analyst Dan McTeague said the rise was being felt across the country, with increases of roughly 15 to 20 cents per litre for gas in recent days. Diesel, he said, is also seeing incremental increases. “We’ve seen a net increase of 15 to 20 cents a litre across the country,” McTeague said. He explained the only reason it hasn’t gone higher is that many stations have essentially eliminated their retail margin — the profits they usually make through convenience store sales. “They can only do so much to prevent their price from going through the roof,” he said. While Vancouver still had the highest prices — hovering around $1.87 to $1.89 per litre — McTeague said Montreal was close behind and slightly ahead of Atlantic Canada. For now, he said Canada’s fuel reserves were helping keep prices from rising even further. “But that’s temporary and may only last a couple of weeks,” McTeague said, adding that drivers should expect additional increases every few days if market pressures continue. If the conflict drags on, he warned prices could eventually climb past $2 a litre in Montreal for the first time in more than a year-and-a-half. Higher costs beyond the pump Economists say the financial impact is unlikely to stop with drivers. Pascal Thériault is an agriculture economist and the director of the Farm Management and Technology program at McGill University. He said rising fuel costs tend to ripple through the entire food system, affecting transportation, processing, packaging and even heating. That often shows up first in fresh produce before spreading to other grocery items. “The price of fruits and vegetables will go up as we move closer to the production season,” Thériault said. “Fertilizer prices will likely increase as well, which raises production costs for farmers and can push overall food prices higher if the crisis doesn’t settle quickly.” He added that forecasts already suggest global inflation could rise by roughly one percentage point if the conflict persists. “We know food inflation in Canada is already higher than general inflation,” he said. “That extra percentage point in food prices would have an important effect on consumers.” Turning to local food sources is often suggested as a solution, but he said that approach has its limits. Thériault highlighted that Canada already imports most of its vegetables from the United States, and local production can be unpredictable. “We could have too much rain, we could have droughts, and that would mean we would have to import more food,” he said. “If we import more food, that drives up prices in the end.” Concordia University economics professor Moshe Lander also said the idea of solving rising food prices simply by buying local is often unrealistic. “If everyone suddenly turns to local producers, you’re assuming they have unlimited capacity to meet that demand — and often they don’t,” he said. “It’s no different than if everybody shows up wanting Taylor Swift tickets. Prices go up pretty quickly.” More industries might be affected Lander said higher fuel costs can quickly spill over into trucking, aviation and other transportation sectors. “All of a sudden, people looking at where they want to go this summer will see things getting more expensive,” Lander said. “We’re only at the pump today, but the spillover effects will reach trucking and airlines, which will have a huge impact on transportation overall.” That could affect everything from shipping costs to summer vacation plans. Despite the economic strain, Lander said there is also a broader human dimension to consider when weighing the consequences of the conflict. “If you ask me whether I’d be willing to pay an extra 10 cents at the pump in exchange for knowing there might be a more responsible regime that treats its neighbours and its own citizens properly, I’m okay with that,” he said. He added that consumers should recognize the trade-offs involved when hoping prices drop quickly. “We have unlimited wants, unlimited resources, and we have to face trade-offs which have consequences,” Lander said. “There’s a cost that comes with the outcome people want to see.”
