Could proposed ceasefire in Iran lower gas pump prices in Maritimes?

Could the proposed Iran ceasefire lower gas prices in the Maritimes?

The ongoing high gas pump prices in the Maritimes are prompting habit changes in many drivers, including David Andrews.

“My wife has a Camry hybrid that gets 5.4 L per 100 km and my vehicle is a 260 horsepower Outback and that gets about 9.5 L, so I’ve altered my behavior,” Andrews says. “Instead of driving my car to work here in town from Oakfield, I tend to drive hers just because of that saving and the about four-and-a-half litre per 100 km.”

A traditional gas-powered SUV is not something Andrews wants to be filling up with gas prices over $1.87 a litre

A ceasefire agreed upon Tuesday between the United States and Iran, which included the opening of the Strait of Hormuz, drove the price per barrel down by $20, but that wasn’t reflected at the pumps.

“I’m sure there’s lots of people that think there’s reasons why gas shouldn’t go down here,” says Halifax resident Justine Barnhart.

According to Eric Kirby from the Nova Scotia Energy Board, the international price only dropped after the markets had already closed for the day.

“If we saw a market movement happening last night after 4:30 into today, we as a board won’t see that price as an official price until tomorrow morning when we come into work. An interruption is always a day or two later than you would see the market price movement.”

The dropping oil prices could be short lived. Iran closed the Strait of Hormuz again Wednesday after Israel launched attacks into Lebanon.

An Iranian general says aggression toward Lebanon is aggression toward Iran.

“Keep in mind the coast is anything but clear yet. This ceasefire just happened, the market is very excited about the prospects, but there’s still a lot of details that haven’t been ironed out,” says petroleum analyst Patrick DeHaan.

And that could again affect oil prices. The Nova Scotia Energy Board uses the interrupter clause if the price of gas changes from 0.6 to 0.8 cents a litre for more than a day.

Kirby says the perception is the interrupter clause is used more to increase gas prices but in fact it’s the opposite. Since they took over pricing, they’ve lowered gas prices more than they’ve put them up.