RBC Economics says Russia-Ukraine war will cost each Canadian household $600 more for gasoline

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      The Russia-Ukraine war is going to cost Canadian households about $10 billion more per year for gasoline.

      RBC Economics made this estimate in a broad report about the impacts of the ongoing conflict in Europe.

      The fighting has caused oil prices rising.

      In the report, RBC Economics noted that with higher prices at the pump, Canadian households will have to spend over $600 each per year to “buy the same amountof gasoline as a few weeks ago”.

      “The surge in oil prices since late February has probably been enough on its own to immediately add about 0.75% to the overall consumer price index,” the paper stated.

      Gasoline prices recently exceeded $2 per litre, and have come down a bit.

      An online check with gasbuddy.com Friday (March 11) showed $1.99 per litre at Husky at 1955 Powell Street in Vancouver.

      Meanwhile, GasWizard.ca is predicting prices at $1.95 a litre in the Vancouver area on Saturday (March 12).

      The RBC report was prepared by economists Craig Wright, Dawn Desjardins, and Nathan Janzen.

      “The conflict has dramatically disrupted trade in the region with aggressive sanctions and risks of supply and transportation disruptions sending some commodity prices soaring,” the paper noted.

      It related that oil prices surged above US$ 120 per barrel, which is a level “not seen since 2008”.

      As of this post, Brent Crude was trading at US$112, and Western Texas Intermediate, $109.

      Canada on February 28 announced a ban on crude oil imports from Russia.

      It was a symbolic gesture as the country has not imported the commodity from Russia since 2019.

      However, Canada gets petroleum products from Russia.

      “We are also taking steps to identify additional petroleum products that may be included in this ban,” stated a February 28 media release by the federal government.

      The Financial Post reported that Canada imported about 10,000 barrels per day of petroleum products from Russia in 2021.

      The paper’s report also noted that about 50 percent of the petroleum imports are made up of gasoline and gasoline blends.

      Meanwhile, RBC Economics stated that low-income households will feel the pinch from rising prices of commodities.

      “These families typically spend a larger share of their income on necessities like food and energy,” the bank’s report stated.

      It continued, “For them, increased costs will be largely unavoidable.”