NEW YORK, March 4 (Reuters) – U.S. retail gasoline prices are expected to rise in the coming weeks after the Trump administration imposed new tariffs on energy imports, traders and analysts said Monday.
The tariffs, aimed at boosting domestic industry, are likely to raise costs for consumers instead. Starting Tuesday, the administration implemented a 25% tariff on all imports from Mexico, a 10% tariff on Canadian energy, and doubled tariffs on Chinese goods to 20%. An additional 25% tariff now applies to all other Canadian imports.
These actions have already caused a sharp increase in wholesale gasoline prices in the U.S. Northeast, a region that depends heavily on Canadian supplies of gasoline, diesel, and heating oil, according to fuel distributor TACenergy.
Retail fuel experts said this price surge will soon be reflected at gas stations across New England. Drivers could see pump prices rise by 20 to 40 cents per gallon in the near term.
Gasoline prices in New England averaged around $3 per gallon last week, according to data from the U.S. Energy Information Administration. “If you’re filling up in the Northeast, you’ll see price increases first and more significantly,” said GasBuddy analyst Patrick De Haan in a blog post Tuesday.
Irving Oil, a major Canadian refiner and the top supplier of fuels to the U.S. Northeast, raised its product prices Tuesday to account for the new tariff costs, De Haan noted. Irving operates a 320,000-barrel-per-day refinery in Saint John, New Brunswick, which exports more than half its fuel output to the U.S. Northeast, according to the company’s website.
A spokesperson for Irving Oil was not immediately available for comment. The company has previously warned that tariffs would lead to higher costs for U.S. customers.
“There’s simply no simple replacement for the products shipped from Irving Oil’s refinery,” TACenergy said in a market commentary. “That’s the primary supply point for multiple terminals in the area.”
U.S. inland refiners that rely on Canadian crude are expected to continue using it and pass on the added costs to consumers. Refiners that use Canadian crude more sparingly may switch to light sweet crude, which could push up prices for U.S. benchmark West Texas Intermediate (WTI) and global benchmark Brent crude, both of which are light sweet grades.
Fuel price increases are also likely in other U.S. regions that depend on imports from Canada and Mexico. The U.S. imports around 4 million barrels per day of Canadian oil, with about 70% of that processed in Midwest refineries specifically designed for Canadian grades.
In addition, the U.S. imports over 450,000 barrels per day of Mexican crude, which is mainly refined along the Gulf Coast.
Analysts say the tariff measures could ripple across national fuel markets, raising costs for millions of drivers.
Related Topics: