TORONTO - Pre-Christmas gas price hikes as high as 10 to 12 cents a litre in Montreal are an isolated trend and not a sign that Canadians should expect drastic rises into the new year, industry observers say.

Gas prices rose more than 10 cents overnight Wednesday and continued to hover as high as 124.9 cents a litre on Friday at certain stations in the Montreal area, according to online gas price monitor GasBuddy.com.

Petroleum consultant Michael Ervin of energy consultancy Kent Marketing Services Ltd. said large price fluctuations have become the norm in Montreal and drivers there should be used to waking up to changes in the 10-cent per litre range.

Gas prices are rising in line with oil prices that have been steadily climbing to above US$90 a barrel this week for the first time since October 2008, Ervin said. However, that won't lead to across the board gas price hikes any time soon, he added.

"We don't expect to see an appreciable rise of pump prices between now and the spring time,'' he said.

In Montreal, retail prices have fluctuated on a weekly basis within a range of 10 or 12 cents a litre for months, a reflection of the kind of competition taking place in the market, which Ervin calls "guerilla price war activity,'' in which smaller stations drop the price of gas for a few days to attract customers, then raise them again before bigger players have a chance to match them.

"The increase is the kind of change that consumers there have seen pretty much every week for the past year anyway, so this is no different.''

Liberal MP and gas guru Dan McTeague said that while Canadian gas prices are about six to seven cents higher than the world average, the wild price swings are isolated to Montreal.

One of the problems in Montreal is the decline in competition at the wholesale level after a number of refineries in the area have been shut down, he said. That means the only competitive market is at the retail level, resulting in the big fluctuations.

"We have allowed concentration and we've allowed a number of refineries to be shut down, most notably in Montreal, in the past 10 years we've lost two significant refineries,'' he said.

"All that does is it intensifies the lock-step pricing at the wholesale level.''

The situation is different in the rest of the country, he said. In the West, prices are relatively stable due to low demand and high supply, whereas prices are much higher in Quebec and Ontario than they were last year due to the inclusion of new taxes.

The higher prices in Montreal are not due to pre-holiday price gouging, which is a widely held myth that is not backed up by market economics, Ervin said. On a national average basis, gas prices have gone up a more normal one cent a litre in the past week, Ervin said.

The average price for a litre of regular across Canada was 110.4 cents on Friday, according to GasBuddy.com, little changed from Thursday. The highest gas prices reported as of Friday afternoon included 117.9 cents in Toronto, 121.5 in Vancouver, 102.9 in Calgary, and 116.2 in Halifax.

Those prices will hold until markets reopen and oil resumes trading on Tuesday.

And while Christmas Eve gas prices were up slightly around the country, pre-holiday increases in pump prices are normal, said Ian Jack, spokesman for the Canadian Automobile Association.

"Whether it's price gouging or market economics, we all know as consumers that prices do tend to rise before holiday weekends in the summer and other major holidays like the Christmas season,'' he said.

"While we certainly hope that the authorities look closely at these matters and make sure that they're above board _and take action if they're not _ what all of us can do as consumers in the meantime is be aware that this usually happens and if at all possible fill up in the couple of days before major holiday periods.''