As of Jan. 5, gas prices were 79.9 cents a litre in Cochrane. And, as of the morning of Jan. 6, the cost of a barrel of oil dropped to $48 U.S.
The last time gas prices were this low was for a brief period in 2008, and before that you would have to look back to 2005. In July of 2008, a barrel of oil was nearly $150 U.S.
In June 2014, the national average for a litre of gas in Canada was $1.39, with Vancouver residents paying the most ($1.51) and Edmontonians the least ($1.21).
Much has been talked about with regards to how this drop in the price of oil is going to affect the Canadian economy, and closer to home, Alberta’s, since a quarter of the province’s economy is based on oil and gas revenue.
When gas prices initially started to rise back in the early 2000s, many believed motorists would simply not drive as much if the cost climbed too high. Since then, we’ve seen that this notion was completely false…people will drive their vehicles regardless of the price at the pumps.
Head to the Safeway parking lot in Cochrane, or Wal-Mart, and what do you see? A whole lot of pickup trucks, that’s what. People will pay for gas, whatever it costs, and many have simply accepted that forking out a few hundred dollars a month for fuel is a reality of life.
But even though drivers will always drive, wouldn’t lower gas prices entice consumers to spend their new found extra pocket money on other things, like travel and tourism, vehicles, televisions and any other product that gets shipped to Canada and should now be cheaper with lower-priced transportation costs?
Canadians often complain (justifiably so) about the fact that Americans pay less than they do for the same item, and a lot of the reasons why that is is because of high shipping costs, and shipping costs are high when gas prices are high.
The same gripe can be heard when it comes to airline tickets, with Canada being one of the most expensive places in the world to fly.
Most people love to travel, and with Christmas now in the rearview mirror and many Cochranites eager for a break from frigid weather, surely there are a lot who would love to book that flight if only our airline tickets were more reasonably priced.
Let’s look at some comparisons, first with the U.S.: if you were to fly from Calgary to Ottawa this weekend, it would cost you $966 roundtrip; by comparison, if you were to fly from Las Vegas to Detroit (approximately the same distance as Calgary to Ottawa), you’d be looking at $756, $210 cheaper.
Phoenix to Los Angeles would ding you $357 roundtrip, while Calgary to Kelowna (the same distance) would be $475.
Comparing Canadian airline prices to those in the U.K. are even more starkly different.
You can fly from Liverpool, England to Barcelona, Spain, a 1,855 km-trip (compared to Calgary to Kelowna, which is 600 km) for 110 pounds, or $197 return. Imagine being able to fly 1,000 km for around $100…that’s $0.10 a kilometre!
The average price of a litre of gas in the U.K. right now, according to The AA (much like our AMA) is 1.15 pounds, or $2.06 Canadian. Although jet fuel used in airplanes is priced differently than the gas we put in our vehicles, how can budget airlines in the U.K., like Ryanair and easyJet, offer such low prices, and by comparison, Canadian providers cannot?
Robert Paterson, a Cochrane travel consultant with JC Travel, said the cost of flying the friendly skies and taking a vacation is affected by the price of oil, not what you see at the pump.
Paterson said the most common vacation destination for Cochranites is Mexico, largely due to it being a low-cost location, and the most common complaint of today’s traveller is the current exchange rates – the Canadian dollar is currently at $0.85 to the U.S. dollar.
For 2015, Paterson said Canadians will be clamoring to get to Cuba before an anticipated influx of U.S. travellers flood the island following the American government defrosting its relations with the Caribbean country.
Paterson also said the cost of last-minute vacations are somewhat cheaper this year from last, with weeklong getaways available for under $1,000, whereas last year they were around $1,200.
So with the cost of filling up your tank down dramatically (at least for now) and winter poised to endure for several more months, why not take advantage and get to the beach before we see $1.20 at the pumps once again?