After two years of lockdown and travel restrictions, many Canadians are eager to pack their suitcases and finally hit the road.
However, there is a catch. As travelers no longer have to worry about COVID-19 testing to get home, they face a new obstacle: rising travel costs driven by increased demand and higher oil prices.
“Although travel restrictions have been removed, new restrictions have been added, which are economic restrictions,” said potential traveler Chanakya Ramdev of Waterloo, Ont.
Ramdev has not seen his parents living in India since 2018. In April, after Canada lifted most travel restrictions, he started looking for planes, and departed in July. However, he was put off by the price: around $ 2,000 for a round trip to India.
Ramdev had hoped prices would fall, but when he returned in May, he said he was appalled to find that air fares to India had risen by around $ 3,000 – a price he could not afford.
“Three thousand dollars for me is equivalent to five months’ 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 older now, were alone in India.”
The cheap deals offered by airlines at the height of the pandemic seem to have disappeared.
According to Statistics CanadaAirline ticket prices rose by more than 20% in April 2022 compared to the pre-pandemic in April 2019.
Over a three-month period, from February to April this year, air fares rose by 13%.
Economist Healy Berg attributes these increases to higher demand and higher oil prices.
According to the US Energy Information AdministrationThe price of jet fuel on the U.S. Gulf Coast in April was six times higher than the same month in 2020.
“We have passengers who are eager to get out … but fewer seats [are] Available from what we usually see at this time of year. Combine this with the fact that airlines have significantly higher costs due to rising aviation fuel prices, we will have fewer seats, which are more expensive.
At present, flights to India can be particularly expensive for airlines as they operate You have to take a longer road From North America due to closure of Russian airspace.
Are you no longer on the go?
Roadtrips are usually a cheaper option than flying, but not so much these days.
Gasoline prices have risen since December. This week, the average price of gasoline in Canada exceeded $ 2 per liter, which is a record high.
So it is perhaps not surprising that, according to a new poll, two-thirds of Canadian drivers surveyed said rising gasoline prices are likely to force them to cancel or limit their trips this summer.
recognitionconducted by Doctors for the Tire and Rubber Association of Canada, surveyed 1,538 Canadians in April. The study had a similar margin of error of +/- 2.5%, 19 times out of 20.
Before the pandemic, Ted Hilton from Ingersoll, Ont., Made the 460-mile[460 km]trip to his cousin’s home in Michigan several times a year.
Although he no longer has to worry about COVID-19 test requirements when crossing the border, Hilton said he can not resume sightseeing until gas prices fall.
He also plans to make fewer trips to visit family in Ontario.
“It’s a little frustrating,” said Hilton, 81, who lives on a steady income. ” You’re addicted to keeping in touch with your friends and family … and not being able to travel and meet them makes you feel a little isolated.
Where do the prices go?
Laura Lau, chief investment officer at Brompton Funds, which closely monitors the energy market, said fuel prices were rising due to limited supply at a time of rising demand.
“When the economy reopens, people go back to work and travel more to travel,” she said. ” [The] Demand is largely at levels before COVID.
Meanwhile, Lau said, supply remains limited due to a ban on Russian oil imports and reduced investment in new drilling projects.
“There is definitely a push 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 almost been avoided.”
Oil analyst Dan McTeige predicts that fuel prices due to increased demand will rise this summer, with petrol prices rising by a further 10%.
“In Toronto, there are days this summer where gasoline will cost $ 2.20 per gallon. Vancouver could earn $ 2.45,” said McTighe, president of Canadians for Affordable Energy.
If his predictions come true, it could be another summer in which a number of Canadians choose to stay close to home – not for fear of COVID-19, but rather for fear of an exorbitant travel expense.