Pain at the pumps as Ottawa gas prices increase

Gas prices are on the rise in Ottawa, with many stations selling gas for $1.736 a litre.

Back-to-back days of price hikes are pushing some businesses to the breaking point.

Across Ontario, the cost of fuel has spiked to mid-August highs as supply remains constrained, which is a serious strain for Basil Hanhan.

"It’s very, very tough and it’s affecting the business, of course," says Hanhan, who owns Five Stars Driving School in Ottawa,.

The added cost for gas he must pump out daily is burning away the possibility of profit.

"Before if it was costing me to fill up for the whole month for $700. Now, it’s not anymore. It’s probably $1,200 and that’s only gas without any maintenance on the brakes or anything else, everything went up. I was operating very well before."

When gas was closer to $1, Hanhan rented a storefront, and was teaching student drivers five days a week, eight hours a day. But having to increase his prices, which he says most other driving schools have done as well, has proved too much for some, who now opt to take fewer lessons.

"I have to shut down my classroom and we have transferred to online," he says. "You cannot afford the driver instructor who is working for the school and a lot of driving instructors went and started their own school which creates a lot of competition for such a small city. At which point are we going to continue going up, up, up with gas prices until which point."

Oil giant Shell reported third-quarter profits of $9.5 billion, compared to $4.1 billion from the same time last year. 

Even as massive profits pour in for big oil, gas price analyst Dan McTeague says to expect the prices to keep going up throughout the fall towards $1.85 per litre.

"We have to know, of course, the province has taken off about six cents of that with respects to the tax which they will have to put back on at the end of December unless they change their mind," says McTeague, the president of Canadians for Affordable Energy. "The reality is that we are probably going to see ourselves going back to $2 a litre for gasoline and diesel is going to continue to rise."

Gas prices dropped slightly two weeks ago after a spike in early October linked to global circumstances including OPEC’s decision to cut oil production.

According to ottawagasprices.com, the average price one year ago in Ottawa was around 142.3 cents per litre.

McTeague predicts gas prices will increae another seven cents a litre over the next two days.

In a message on Twitter, McTeague said prices will jump three cents a litre on Friday, followed by a four cents a litre increase on Saturday to $1.809 a litre.