SOMBA K'E/YELLOWKNIFE - Gas prices for regular fuel in Yellowknife jumped nine cents to $1.259 per litre this week and a Calgary-based gas consultant is predicting more hikes in the next few months.

"I expect by maybe springtime or late spring you might see another 10 cent rise in the price of gasoline," said Michael Ervin, vice-president and director of consulting services with Kent Marketing Services Ltd.

It's the first noticeable hike since the summer of 2009 when gas prices reached $1.45 per litre, apart from last November when a ferry outage drove prices temporarily to $1.99 per litre.

Ervin said the price of gas in Yellowknife is six cents higher than the national average.

Chelsea Dunn is one Yellowknife resident who has noticed the higher prices at the pumps. She said she has been driving less and using the family's smaller car, a Saturn Ion, more often instead of their truck in an attempt to reduce fuel use.

Darwin Norwegian, like Dunn, was also fuelling up at the Shell gas pumps on Thursday. At first, he didn't notice that the price of gas had gone up as he was refuelling his Ford F-150.

"I think it's pretty crazy. It's up nine cents - that's a pretty big jump," he said.

One reason for the higher price is that gasoline dealers in the city have to compensate for higher transportation costs to ship fuel from refineries south of the NWT, Ervin said. Another reason is that gas stations in the city sell less fuel than in larger Canadian cities so they need a higher mark-up, said Ervin.

What Yellowknife residents are seeing this week is the market finally catching up after a 12 cent a litre increase in the price of crude since January 2010, he explained.

"If you look back to a year ago, prices were in the $1.16 to $1.18 level. Again, Yellowknife is one of a very few number of markets where prices actually do not change very much at all from month to month because their retail margins are so high, smaller fluctuations in the wholesale prices don't have to be reacted to so quickly, as they would in other markets," said Ervin.

He added that his is a "blessing" or a "benefit" to consumers in Yellowknife because our city, so far, has been the "last to ever see the consequences of those higher crude prices."

Ervin said a common misconception is to link the rise in gas prices to events happening overseas, like the turmoil in the Middle East.

"It's so common for me to hear news of geopolitical events and concerns about crude prices, and then people trying to link the change at the pump the day after to that news itself," he said. "But really, nothing could be further from the truth."

Instead, he attributes the increase in the price of crude oil and subsequently the increase in gas prices to the rising global demand for crude oil as more and more nations recover from the global recession.

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