High fuel prices hamper Canadians’ long-awaited travel plans

After two years of lockdowns and travel restrictions, many Canadians are eager to pack up and finally hit the road.

However, there is a hitch. While travelers no longer have to worry about COVID-19 testing to go home, they face a new hurdle: rising travel costs fueled by increased demand and higher oil prices.

“Although travel restrictions have been removed, new restrictions have been added, which are financial restrictions,” said potential traveler Chanakya Ramdev from Waterloo, Ontario.

Ramdev has not seen his parents, who live in India, since 2018. In April, after Canada lifted most travel restrictions, he began searching for flights, departing in July. However, it was put off by the price: about $2000 for a round trip to India.

Ramdev had hoped prices would come down, but when he checked back in May, he said he was dismayed to find that airfare to India had gone up to around $3,000 – a price he could not afford.

“Three thousand dollars to me is equal to five months of rent,” said the 30-year-old businessman, who has put his travel plans on hold.

“It was very frustrating because my parents, who are both seniors now, were all alone in India.”

said Chanakya Ramdev of Waterloo, Ont. He has had to put his travel plans on hold to visit his parents in India as he cannot afford the current ticket price. (Craig Chivers/CBC News)

Those cheap deals offered by airlines during the height of the pandemic seem to have disappeared.

According to Statistics CanadaAir ticket prices increased by more than 20 percent in April 2022 compared to before the pandemic in April 2019.

Over a three-month period, from February to April of this year, airfares jumped 13 percent.

Economist Healy Berg blames the increases on higher demand and higher oil prices.

According to the US Energy Information AdministrationThe price of jet fuel in the US Gulf Coast in April was six times higher compared to the same month in 2020.

“We have passengers eager to get out…but fewer seats [are] Available from what we usually see at this time of year. Combine that with the airlines having significantly higher costs from the increase in jet fuel prices, we will have fewer seats that are more expensive.”

At this time, flights to India can be particularly expensive for airlines as they operate You must take a longer path From North America due to the closure of Russian airspace.

Not on the road again?

Road travel is usually a more budget-friendly option than flying, but not so much these days.

Gas prices have risen since December. This week, the average price of gas in Canada exceeded $2 a liter, a record high.

So perhaps not surprisingly, according to a new poll, two-thirds of Canadian drivers surveyed said higher gas prices will likely force them to cancel or limit their road trips this summer.

reconnaissanceconducted by Leger for the Canadian Tire and Rubber Association, polled 1,538 Canadians in April. The survey had a similar margin of error of +/- 2.5 percent, 19 times out of 20.

Watch | Gas theft on the rise due to higher pump prices:

Gas theft is on the rise as prices continue to rise

As prices continue to rise, Ontario gas stations are reporting a rise in fuel theft.

Before the pandemic, Ted Hilton of Ingersoll, Ont., drove the 460-kilometer drive to his cousin’s Michigan home several times a year.

Although he no longer has to worry about COVID-19 testing requirements when crossing the border, Hilton said he can’t resume his visits until the price of gas drops.

He also plans to take fewer trips to visit family in Ontario.

“It’s kind of frustrating,” said Hilton, 81, who lives on a fixed income.You depend on keeping in touch with friends and relatives… and not being able to travel and meet them, it makes you feel somewhat isolated.”

Where will the prices go?

Laura Lau, chief investment officer at Brompton Funds, which closely follows the energy market, said fuel prices are rising due to limited supply at a time of increased demand.

“With the economy reopening, people are going back to work, and they’re traveling more to travel,” she said. “[The] The demand side is essentially at pre-COVID levels.”

Meanwhile, Lau said, supply remains restricted due to the ban on Russian oil imports and reduced investment in new drilling projects.

“There is definitely a drive for companies to use less carbon and a trend for electric cars,” she said. “So what we’ve seen is that oil and gas production has been almost shunned.”

Gasoline rose to $2.10 a liter in Sydney, NS, this week, while diesel fell to $2.43. (Tom Ayers/CBC)

Petroleum Analyst Dan McTeige predicts that due to increased demand, fuel prices will rise higher this summer with gas prices rising another 10 percent.

“In Toronto, there are days this summer when gasoline will cost $2.20 a liter. Vancouver can make $2.45,” said McTighe, president of Canadians for Affordable Energy.

If his predictions come true, it could be another summer as a number of Canadians choose to stay closer to their homes — not out of fear of COVID-19, but instead, out of fear of an exorbitant travel bill.

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