THE CANADIAN PRESS/Sean Kilpatrick

CALGARY - Gasoline prices this summer are expected to drop below their current levels, which already seem like a bargain compared to what Canadian motorists were forced to pay a year ago.

Roger McKnight, a senior petroleum adviser for En-Pro International Inc., is predicting that a litre of gasoline will cost in the high 80-cent to low 90-cent range for the rest of July and August.

"The demand for gasoline is basically flat to negative, and this is the peak driving season," McKnight said in an interview from Oshawa, Ont.

"So there's no point in making snowshoes and trying to sell them in July."

The average price of regular gasoline in Canada was 98.7 cents per litre during the first week of July, according to the latest weekly pump price survey released Tuesday by Calgary consulting firm MJ Ervin & Associates.

The average price was roughly $1.02 in the prior week's survey.

At this time a year ago, Canadians were on average shelling out an eye-popping $1.40 per litre.

One major difference between the gasp-inducing prices of 2008 and the more subdued prices of 2009 is the value of crude oil, the raw commodity from which gasoline, diesel and other products are made.

A year ago, a barrel of crude was trading at around US$140 and hurdling toward its all-time high US$147.27, reached on July 11, 2008.

On Tuesday, the crude contract for August delivery was a mere shadow of that record, settling at $62.78 per barrel - a US$10 drop from just a week ago.

"Oil prices are obviously one piece of the puzzle, but it's not the only one," said ATB Financial senior economist Todd Hirsch.

"The other really big piece is just the recession blues hitting North American motorists."

Consumers are more wary of their spending thanks to the recession, particularly if they have joined the ranks of the unemployed, so demand for gasoline has slackened and left supplies plentiful.

Hirsch said he expects gasoline prices to be more or less on an even keel throughout the rest of the summer, perhaps getting a small bump in either direction if crude oil rises or falls.

"If anything, I would see stability or maybe even softer gas prices, depending on how this recession plays out over the summer and fall," he said.

The summer of 2008 was also marked by a series of gasoline and diesel shortages throughout Western Canada, as refineries suffered technical glitches.

"As far as refinery infrastructure in Canada today is concerned, everything seems to be ticking along just fine," En-Pro's McKnight said, noting that many energy firms got their planned maintenance work over with toward earlier in the spring.

There's a risk gasoline prices could spike in late August and early September when hurricane season kicks into gear.

Any supply disruptions along the storm-prone Gulf of Mexico, home to numerous refineries, would ripple into Canada.

"Everybody says: 'What's an outage in the Gulf of Mexico got to do with Canada?' Well, it's because wholesale prices jump in the States, they follow in Canada," McKnight said.

"There is no border. There is no 49th parallel when it comes to gasoline and diesel pricing in both countries."

Gasbuddy.com, a website that helps drivers find bargains by compiling prices reported by its members, said the average pump price in Canada on Tuesday was around C$1.03 - roughly unchanged over the past month.