Saskatoon gas nears $1.80 per litre, analyst says 'the sky is the limit'

Gas prices in Saskatoon reached as high as $1.789 per litre on Wednesday — and one analyst says "the sky is the limit" for how far prices could climb.

"It's very difficult to see where this is going to end," said Dan McTeague, petroleum analyst and president of Canadians for Affordable Energy.

A Shell gas station in Saskatoon was selling gasoline for $1.789 per litre with diesel priced at $1.999.

McTeague said it's a safe bet that gasoline prices could rise to $1.90 or $2 per litre, and noted that diesel prices are rising even faster.

"To put things in perspective, we're not in the summer demand driving period. For these prices to be this high during the winter is really a bad omen, and it suggests that these prices are here to stay. And there's a greater likelihood of them going up than simply staying where they are right now."

As for the cause of the increase, he said the Russian invasion of Ukraine was the unfortunate "icing on the cake" on top of a global oil shortage, in which Canada played "no small part" thanks to stalled or cancelled pipeline projects.

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Earlier this week, Alberta Premier Jason Kenney announced the province will stop collecting its fuel tax in April to provide relief for at the pump.

The drop in tax revenue is expected to be made up as Alberta reaps the benefits of surging oil prices.

When asked if Saskatchewan would make a similar move, Premier Scott Moe told reporters on Monday that "we are starting to have these discussions as to you know, what we would do if there were potential revenues increases, in particular revenue increases due to the price of oil."

He said rather than lifting the gas tax, options could include provincial debt repayment, a savings account on behalf of residents, or returning some oil revenue directly to the people of Saskatchewan.