US Pump Prices Set To Rise, Say Analysts, Traders

US consumers will see higher prices at the petrol pump from President Donald Trump's decision on Feb 1 to apply tariffs on Canadian and Mexican oil, according to analysts and fuel traders.

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NEW YORK -

The likely hike in fuel prices reflects the double-edged nature of Mr Trump's trade protections which are designed to bolster domestic business and pressure US neighbours to curb illegal immigration and drug smuggling, but which will also run counter to his promises to tackle inflation.

The US imports some 4 million barrels per day (bpd) of Canadian oil, 70 per cent of which is processed by refiners in the Midwest. It also imports over 450,000 bpd of Mexican oil, mainly for refiners concentrated around the US Gulf Coast.

Tariffs on those imports mean higher costs for making finished fuels like petrol, much of which is likely to be passed along to US consumers.

"Expect fuel prices will rise noticeably if oil and refined products are not exempt," GasBuddy analyst Patrick De Haan said in a post on social media. He told Reuters in a telephone interview the hit to consumers will get worse the longer the tariffs drag on.

The American Fuel and Petrochemical Manufacturers Association, which represents US refining companies, said on Feb 1 it hopes the tariffs are lifted before consumers start to feel the impact.