- Category: Economic
- Published Thursday, January 21, 2016
- CTV News
Gas prices are dropping to nearly 75 cents a litre in some parts of the country, while costs are rising at the grocery store, as a weak market for crude oil takes its toll on the balance of Canada's economy.
The value of a barrel of oil has plummeted dramatically in the last year, dragging down the value of the Canadian dollar and severely impacting the oilsands-driven economy of Alberta. At the same time, the cost of groceries has risen, due to the higher cost of importing fruits and vegetables from other countries.
On Wednesday, a barrel of crude oil traded for $42.70, or nearly $17 less than it was worth at the same time last year. The loonie has also plunged, dropping by approximately 10 cents from its value at this time last year, to just under 70 cents USD.
Gas industry watcher Dan McTeague says the drop in prices is due in part to an excess of stockpiled oil in the United States, particularly in Chicago. "There are indications today that that Chicago price continues to decline dramatically," McTeague told CTV Calgary on Wednesday.
He added that prices are approaching their lowest levels since December of 2008, in the middle of the economic recession.
"That could be good news for motorists over the next couple of days as prices continue to trend down," he said.
Many motorists are taking advantage of the low gas prices to travel more within the country, on road trips or on camping trips.
For instance, in Calgary, Neil Friedenberg of Arkan Trailers says he's expecting a spike in camping trailer sales, because the price of gas is so low.
"Camping is very affordable, especially with the lower gas prices," he told CTV Calgary.
But while it may be cheaper to take the car out for a drive, a trip to the grocery has become noticeably more expensive.
An estimated 80 per cent of Canada's groceries are imported from outside the country, and with the loonie struggling, the price of importing that food is going up.
The cost of food rose by 4.1 per cent last year, and will likely rise another three per cent this year, according to a University of Guelph annual food prices report.
With files from CTV Edmonton and CTV Calgary