Massive flooding in Houston, Texas — a major oil refining hub in North America — could soon lead to higher gasoline prices in Canada.
The flooding is a result of Hurricane Harvey, which hit the Texas coast over the weekend and has brought with it record rain. The storm has displaced thousands of people and has shut down the city’s major businesses — including the oil refining facilities of companies like ExxonMobil and Shell.
Dan McTeague, a petroleum analyst with GasBuddy.com, told the CBC that Canadians could start seeing “noticeable” price hikes as early as this Wednesday.
“Hurricane Harvey's associated flooding and longer than expected stall over the Texas refinery row is likely to see steep price hikes at the pumps across North America for the next few weeks," McTeague said.
While Harvey has since been downgraded to a tropical storm, rain is expected to continue until at least Friday. Oil operations in the region could be shut down for weeks, depending on how long it takes for the water to recede and how much damage facilities sustain.
"The damage could worsen if continued rains extend the flooding," said Sal Guatieri, economist at the Bank of Montreal in a note to clients.
McTeague told the CBC that Vancouver, Victoria and much of B.C. can expect gas prices to rise three cents this week, while cities in Alberta and Saskatchewan should expect a hike of eight cents a litre.
Most of Ontario — including Ontario — should see prices rise five cents. Montreal, meanwhile, could see prices rise as much as 15 cents by Wednesday. Atlantic provinces can expect a five cent increase.