At the end of this week, the provincial government will reduce its share of the fuel tax, but economic analyst Dan McTeague warns that the exemption will likely be temporary.

The Ontario government is scheduled to reduce its share of the gas tax by 5.7 cents per liter for six months, starting from Canada Day.

Dan McTeague, Head of Energy, stated that this step could help lower prices "by up to seven cents per liter" on Friday, making the average cost of a liter of fuel in the Greater Toronto Area reach 195.9 cents per liter over the weekend.

However, McTeague said prices are likely to rise in the coming weeks.

He added, "Despite what the provincial government has done, the data continues to indicate that prices are much higher at gas stations." "I know there will be price increases, and they will continue on days when the market is volatile. But what we are seeing is largely what we will get in the first two weeks of July, after which I think we will head towards $2.20 and possibly $2.25 per liter."

Fuel costs have risen by more than 40 percent so far in 2022, compounded by the repercussions of the war in Ukraine.

Looking ahead, McTeague said he expects the oil price to rise to $130 USD per barrel this summer, which will put continuous upward pressure on fuel prices.

He said the anticipated federal government's clean fuel standard, which will be issued in July, "will set the wheel rolling to raise prices even higher" but probably will not happen until next year.

The good news for drivers, at least for this weekend, is that fuel prices will be cheaper outside the Greater Toronto Area.

McTeague said many smaller communities outside Toronto tend to pay three or four cents less per liter, especially on weekends.

He added: "My advice if you are heading to a town outside Toronto is that prices are likely to be cheaper than what you pay here."