No more provincial gas tax starting Sunday. Will Albertans actually benefit?

Gasoline costs in Alberta are beginning to rise after hitting a 22-month low this week, simply days earlier than the province will cease gathering the provincial fuel tax on Jan. 1.

And that begs the query: are fuel retailers elevating costs to allow them to pocket the additional cash, like then-premier Jason Kenney was accused of in July?

Information from GasBuddy reveals that costs hit $1.22 per gallon on Dec. 24, the bottom value since about March 2021. Nonetheless, on Friday, some stations posted costs as excessive as $1.34 per gallon.

The Alberta authorities will droop the provincial gas tax for six months beginning Sunday. The province stated it might save Albertans 13 cents per liter on the pump.

Nonetheless, drivers have solely been paying a fraction of that since October due to modifications made beneath Kenney, that means fuel costs will solely drop by about 4 cents.

Vijay Muralidharan, director of R Dice Financial Consulting Inc. in Calgary, stated the transfer will have an effect for Albertans, particularly as a result of the discount for the primary six months won’t be based mostly on the worth of crude oil, in contrast to final time when the gas tax was eliminated.

“This one is a set discount in gas tax,” he stated.

Muralidharan stated fuel retailers can not and won’t enhance fuel costs in order that they’ll pocket the additional cent per litre.

“The retail margins in Canada are an ideal aggressive surroundings. They can not set costs like that. It isn’t simple for them to do this as a result of you might have aggressive costs from neighboring provinces,” he stated.

“The market doesn’t work on such stations.”

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Albertans to see tax hike on fuel costs Oct. 1

Nonetheless, the power critic for the NDP isn’t so positive.

“I hope that when the tax is eliminated, we see fuel costs go down as a result of that is cash that is coming from the federal government that is meant to enter the fingers of Albertans who’re struggling proper now. It is not meant to go to revenue traces ,” Kathleen Ganley stated.

Ganley stated since Kenney demanded the inquiry this summer time, neither the opposition nor Albertans have heard something concerning the outcomes.

“I feel that is simply one other instance of the UCP claiming to need to assist Albertans however not taking the mandatory sensible steps to truly accomplish that.”

Power Minister Pete Guthrie didn’t reply for remark on the time of publication.

Muralidharan believes winter storms and frozen gear in america are a part of what’s driving the costs up.

He stated the rising costs had been on account of 4 components: crude costs, refinery margins, retail margins and taxes.

“What we noticed over Christmas was crude costs fell. They got here down. Refinery margins had been 35 to 45 cents within the fall. They got here down to twenty cents throughout Christmas time,” stated Muralidharan.

Muralidharan stated that previously few days, refinery margins have risen by about 12 cents per liter as a result of eight to 10 refineries in america have been shut down on account of winter storms.

“They had been shut down for greater than every week, which meant that provide for diesel and gasoline was restricted, and that created the refinery margins to leap,” he stated.

As soon as this provide squeeze clears, he stated costs ought to fall once more.

Wanting forward, Muralidharan stated refinery upkeep might push costs up a bit within the first quarter of 2023, however the massive issue influencing change can be unplanned outages.

“If these unplanned outages and the struggle in Ukraine intensify, you could possibly see a constructive rise in costs. However in my estimation, I am increasingly on the draw back,” he stated.

“I feel the upper rates of interest are going to hit the economic system onerous and we will have an financial slowdown in Canada, which ought to ease fuel costs.”

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