Date of publication: 01 Apr 2022 • 7 hours ago • 4 minutes reading • 12 comments Prime Minister Jason Kenne blew up his truck after a press conference at the Co-op at the Macleod Trail SE on Friday, April 1, 2022. Alberta temporarily cut 13 cents price of a liter of gasoline. Photo by Azin Ghaffari / Postmedia
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As Prime Minister Jason Kenney pumped $ 77 worth of gasoline into his blue Dodge Ram truck, symbolically proving the removal of the provincial gas tax on Friday, most Calgary gas stations were on the line.
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The temporary abolition of the tax of 13 cents per liter came into force on April 1, reducing the average prices in the city from 167.5 cents on Thursday to the range of 156.9. The fall is fulfilling Kenney’s promise to ease the pain in the pump caused by the rise in world oil prices. “This is big money when Alberts need it most,” Kenney said of the tax exemption. “We are living through 30 years of high inflation; and the Alberta government has heard the Alberta people say we need to take real action to reduce the cost of living.” The full tax exemption applies as long as the West Texas Intermediate crude oil price remains above $ 90 per barrel. The WTI closed at $ 99.42 on Friday. If the tax is lifted for 12 months, Kenney said he would save $ 1.4 billion from the Alberts.
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Gasoline prices remained relatively unchanged in Calgary over the past three weeks, when the WTI jumped to $ 123.70 on March 8. The WTI price fell quickly after that and has been fluctuating ever since. On Wednesday, for example, it closed at $ 107.82, down $ 8.40 in just two days. The concern for some is how much of the tax cut is actually passed on to consumers and is not eliminated in the WTI’s changing costs. Kenney showed that gas was actually rising to other jurisdictions in Canada while falling here. Finance Minister Travis Toews said there was a delay of about two weeks from the time the gas was purchased wholesale to when it passed through the pump, so the price reflected when the store bought it. He said the stores would reduce the cost of the provincial gas tax to cover the overlap in fuels purchased before April 1st.
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He reiterated that the province will monitor the situation closely to ensure that the economies are transferred to the Albertans. Prime Minister Jason Kenney speaks at a news conference at a Co-op gas station. Photo by Azin Ghaffari / Postmedia But NDP energy critic Kathleen Ganley is unconvinced that prices will remain lower and has once again called on the government to conduct an independent audit to ensure that tax savings are not just collected from shops. “One thing we all know about gas prices is that they are constantly moving,” he told a news release. “We will have to wait and see if falling prices will survive for more than a few days.” Trevor Tomb, a professor of economics at the University of Calgary, discusses the idea of a one-year lag between the price of gas and the price of the WTI. He said the cost of the pump usually reflects the market price quite closely.
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He said, however, that in terms of taxes on gasoline, there is a lot of evidence to suggest that there will be almost full compliance. “We may well see gasoline prices higher next week or next week than we saw today,” Tombe said. “This does not mean that tax cuts have not reduced prices. We must always think about what the prices would be if the government did not reduce the (tax) “. He added that stations that have not yet reduced their price will almost certainly do so in the coming days, as they will be forced by their competition. The drop in price was welcomed by Paul Tekla, who makes deliveries for companies such as Door Dash and Skip the Dishes, especially as he did not wait for the discount. He said he paid an extra $ 250 a month for gas, and had to refill his car every other day.
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“It has gone up a lot,” he said as he filled his sedan at a Shell gas station for 156.6 cents a liter. “In the beginning of COVID, we had that time period where it was extremely cheap and about $ 20 to fill my whole car, now I have to spend $ 80.” Julie McDonald does not use her car a lot for work, but because she lives in Ogden she relies on it every time she goes to visit someone or do business. She knew relief was coming, but she was glad to see her in reality. “Especially when I remember that gas is under a dollar, you notice it every time you fill up,” he said as he pumped gas at a Petro-Canada station, also at 156.6 per liter. “I appreciate what is happening in the world and I understand why it is happening, so I am not going to cry about it, but it is nice to have a postponement.”
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Carbon tax is increasing
Removing some of the wind from Kenney’s sails was raising the federal carbon tax from $ 40 a tonne to $ 50 a tonne on Friday, adding about 2.3 cents to the cost of a liter of gasoline, including the GST. This means that instead of the price being 13 cents lower on Friday, most gas stations were about 10-11 cents lower. Kenney last week joined Saskatchewan Prime Minister Scott Moe and Manitoba Prime Minister Heather Stephenson in a letter to the federal government calling for a carbon tax cut. On Friday morning, Natural Resources Secretary Jonathon Wilkinson responded to the Prairie prime ministers by rejecting their appeals and reiterating that they would continue with the coal pricing. “The truth is that 94% of the price of gas has nothing to do with the price of pollution,” he wrote. “The vast majority of Canadians seeing the price increase on pumps right now is due to rising crude oil prices – largely due to Russia’s illegal invasion of Ukraine.” [email protected] Twitter: @ JoshAldrich03
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