99 cent gas may be coming to a pump year you after OPEC move

It’s been a while since it’s been this cheap to fill up your car, and it’s about to get even cheaper.

Following a move by OPEC to maintain oil production at elevated levels, Ontario gas prices that have already been flirting with the $1 a litre level in some towns could fall below it for the first time in about five years.

In the prairie provinces, where gas is typically cheapest, prices have already dipped below the magic, and in Edmonton are coming close to 90 cents.

The rest of Canada pays more for the privilege of clogging the nation’s highways, and on Thursday Toronto’s cheapest litre was running about $1.04 at Costco and $1.06 at Pioneer. Prices were lower outside of the city, touching $1.01 a litre in Peterborough.

Gas costs have been diving over the last four months as a global supply glut has pulled the price of oil lower.

And Thursday’s decision by OPEC to maintain their current output target of 30 million barrels a day – instead of cutting it to reduce the current oversupply – will yank that even lower, says Dan McTeague, senior petroleum analyst at gasbuddy.com.

“It would appear there’s at least a $4 a barrel (of oil) decrease coming and that would likely lead to a decrease at the pumps come Saturday morning. At this stage it look like at least 2 cents a litre, but it could be more,” he says.

Of course, cheaper oil is a double-edged sword in this country, and the falling price of the commodity will only raise stress levels among the Alberta oil producers, even as they pay less to top up their pickup trucks.

And that is by design, says McTeague, as OPEC keeps the supply taps open to squeeze out Canadian and U.S. producers who pay more to extract oil. A lower price, if it shuts down pricey oil sands projects, is a boon to the OPEC producers.

But for the average driver, who doesn’t live and die by Canadian economic growth projections, a buck a litre can feel like getting throwback prices at the local steakhouse.

It was just in July when average gas prices in Canada peaked at just under $1.40 a litre. In pricey markets such as Vancouver, motorists were paying more than $1.50. Since then, prices have plunged to just over $1.10 a litre nationwide, which translates into a not-too-shabby savings of about $15 bucks on a 50 litre tank fillup for you compact car.

And if you already have a full tank, no need to sprint down to the local gas station with the jerrycans, says McTeague.

“I think there is going to be a lot of back and forth for the foreseeable future and that’s why I think these prices are going to remain as you see them - historically low at least for the next couple of months.”