Liberal MP and gas price watchdog Dan McTeague says Canada needs an oil price monitoring agency after prices at the pumps skyrocketed overnight to about $1.32 per litre of regular gasoline at most Ottawa stations.

"The price increase at the world market for gasoline went up 16 cents a gallon (Friday)," McTeague told CTV's Canada AM. "We've been paying . . . something in the order of 48 cents a gallon.

"Clearly, there's something wrong with the state of competition in the gasoline industry in Canada."

Angry Ottawa residents

The overnight increase at gas stations in Ottawa was a 15-cent jump from Thursday's average price of regular gasoline, which sat at about $1.17 per litre. The hike is the largest one-day increase in 17 years -- something that's angered many Ottawa residents as they filled up their tanks Friday morning.

"It's ridiculous because it doesn't make sense how it can go from $1.19 one day and to $1.30 the next," said one motorist. "Even though there's a storm, there's going to be the same amount of gas, I don't understand why the gouging is there, I really don't. I think it's ridiculous and I hope the new prime minister does something about it."

"I get paid for my mileage but now that gas prices have gone up, I don't get any more money for my mileage and so now I'm losing money basically to go to work," said another driver.

"We can't afford it . . . Here in Ottawa, the price of gas is too high," said one taxi driver.

Hurricane Ike hikes price of oil

The hike at the pumps is being blamed on the threat of Hurricane Ike, after the storm sent the price of oil up 94 cents to US$101.81 a barrel Friday on the New York Mercantile Exchange in Singapore.

David Doig, an oil and gas analyst, said refineries in the Gulf Coast have made significant improvements to withstand storms after hurricane Katrina and Rita.

"The good thing is the storm is passing to the south of where the majority of these platforms are -- a lot of these evacuations are just for precautionary measures," Doig told CTV's Canada AM on Friday.

"They don't think they're going to get any damage to the rigs themselves but it will do damage to production."

Several refineries halt operations

Exxon Mobil Corp., Valero Energy Corp., ConocoPhillips and Marathon Oil Co. were among the companies halting operations ahead of Ike's arrival.

Doig said with the refineries down, companies won't be able to convert the crude oil into gasoline.

Additionally, U.S. gasoline inventories are at a five-year low, said Doig.

"The margins for the refineries to convert over to gasoline was at an all time low at the start of September," he said.

"It's actually now tripled and is now upwards of $15 dollars (so) there's now that incentive for them to convert the oil into gasoline however now they'll have to be shut down."

Problem stems from oil industry, says McTeauge

McTeague said Friday, however, that the problem is bigger than the threat of Ike.

He said refineries have lowered production as the price of oil has declined in the past seven weeks, adding the industry has "decided that it doesn't want to produce."

"They've actually created a scarcity situation just in advance of the next stage of increases as we head into the colder season -- not just for diesel, not just for gasoline, but for home heating fuel," said McTeague.

He said if there are not enough fossil fuels then maybe it's time to look at the Liberals' Green Shift plan which would help create alternative sources of energy.