LONDON, Ont. -- What became of those 79-cents-a-litre prices we were paying at the pumps only months ago?

The world is still awash in crude oil and prices are languishing around $60 a barrel. So why are motorists paying around $1.20 a litre, not far from the price this time last year when crude soared to $107 a barrel?

The answer isn't easy, and it's multi-layered.

Dan McTeague, a former MP and analyst with GasBuddy.com, said it's true there's still a glut of crude oil in the world -- yes, despite the turmoil caused by ISIS, Iraq oil production and exports hit record levels in April.

But that's only part of the story. Oil has to be transported, stored, refined, taxed and delivered to stations.

"There's a lot of moving parts. We have a glut of oil but still have a tight market for gasoline," McTeague said.

GAS WARS GONE

When, for instance, the price dipped to 79 cents a litre in London, Ont., in late January, the retail margin was 2.2 cents. Spencer Knipping, an analyst with Ontario Energy Ministry, said that price doesn't even cover overhead costs for gas stations.

"That margin is too low for a station to make money," he said.

But the margin has risen steadily and was up to 10 cents a litre last week.

TEMPS UP, PRICES UP

Demand for gasoline shoots up every summer, but McTeague said demand is up about 6% above this time last year as American motorists buy bigger vehicles and buy gas that is still cheaper than a year ago.

The U.S. has also become a major exporter of gasoline, tightening up the domestic supply.

"We see high demand bumping up against tight supplies -- we see this every year," Parent said.

PROFIT

Wholesales pries have jumped 3.4 cents a litre in the past few weeks. McTeague said the increase is unjustified and simply pocketed by the big oil companies because of a lack of competition.

LOW LOONIE

That $60-a-barrel oil is always priced in U.S. dollars, even if it's produced in Canada. With a loonie down around 80 cents USD, that means $60 a barrel is more like $75 a barrel in Canadian dollars.

Along with price, our market is also driven by U.S. supply. Although Canada produces plenty of crude, we don't have the refining capacity to meet our daily demand of about 2.3 million barrels. Wholesale prices have been climbing because four big U.S. refineries have cut back production due to breakdowns and maintenance.