The conflict in the Middle East is starting to hurt Canadians at the pumps, but the rising cost of diesel fuel has the potential for even further-reaching consequences at home, affecting truckers, farmers and, inevitably, consumers.
Before the start of the U.S.-Israeli war against Iran, which began on Feb. 28, the average price of gasoline in Canada was about 139.6 cents per litre, according to Natural Resources Canada. As of Tuesday, that had risen to 157.3 cents and is estimated to reach 162 cents by March 17.
The price of diesel has increased by about 33 cents per litre in the same time frame, from an average of 166.3 cents per litre to 199.7 cents as of Tuesday. It's expected to rise to 206.3 cents next week.
“It's going to have an immediate and potentially long-lasting effect on our bottom lines,” said Drew Spoelstra, President of the Ontario Federation of Agriculture.
“We don't have any way to pass these additional costs on. We take the price that we get for a lot of our products.”
The increased costs are a direct result of the conflict in Iran and its government's power to disrupt global oil shipments through the Strait of Hormuz, which has caused the price of oil to reach USD $100 per barrel.
Around 20 per cent of the world's oil and gas supply flows through the strategic chokepoint — 33 kilometres wide at its narrowest with shipping lanes no more than two kilometres wide. Military activity in the area has disrupted shipping, and Iran, which may have placed mines along the strait, has warned vessels not to pass through the waterway, leaving many oil shipments in limbo.
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