An editorial by Mel Rothenburger.
ANYONE WHO DRIVES may be forgiven for being skeptical that tensions in Ukraine are keeping gas prices high in Kamloops.
It seems ridiculous that a conflict on the other side of the world could affect how much we pay for a fill-up here in the Tournament Capital but a little research explains it.
Ukraine moves Russian oil to nearby countries that then send it elsewhere. Since Russia is second only to the U.S. in the world’s oil production, and 40 per cent of Europe’s oil supply comes from Russia, any interruption will send Europe looking for it elsewhere, affecting how much is available in Canada.
Sanctions against Russia could further choke off supply and also motivate Vladimir Putin to use oil as a weapon against the West.
Just as we were indignantly discounting the Ukraine-Kamloops gas-price connection, stories out of the U.S. were warning that prices in that country, which have already shot up due to the prospect of a Russian invasion, could soar if it actually happens.
Here at home, gas-price watchdog Dan McTeague, a name familiar to us as the go-to guy on such matters, said on the weekend that keeping a lid on prices will require averting war in Ukraine “at all costs.” Another analyst said we could see gas selling for as much as $1.90 this year.
History confirms that scenario. In 2014, Russia’s invasion of Crimea had a similar effect.
I’m usually as baffled about gas-price hikes as anyone else but this is an explanation that makes sense. It’s a reminder that we live in a global economy in which the law of supply and demand rules.
Let’s hope McTeague is right when he says an easing of tensions way over there could result in a significant lowering of prices over here.
And at least the Ukraine explanation is better than no explanation at all, which is what we usually get whenever gas prices spike.
Mel Rothenburger is a former mayor of Kamloops and a retired newspaper editor. He is a regular contributor to CFJC Today, publishes the ArmchairMayor.ca opinion website, and is a director on the Thompson-Nicola Regional District board. He can be reached at email@example.com.