Gas prices drop as Alberta stops collecting gas tax

Many Albertans woke up to relief at the pumps Friday.

At 12:01 a.m., the provincial government stopped collecting the 13-cent-per-litre gas tax. The move was announced last month as a way to help consumers with the rising price of gas.

Read more: Gas tax savings to start for Alberta drivers Friday: ‘Watching like a hawk’

While not all gas stations in Edmonton had dropped their prices first thing Friday morning, several were showing prices of $1.54.6. That’s down from about $1.65 at many stations on Thursday. One gas station at the Edmonton International Airport had gas for $1.52.9 per litre, while another was still at $1.65.9 around 5 a.m.

Gas prices in Edmonton drop Friday, April 1, 2022 as the province stops collecting the 13-cent-per-litre gas tax. Global News

Stations in Calgary also saw about a 10-cent drop at the pumps. The price at the Mission Co-op gas station, where Premier Jason Kenney is set to hold a news conference Friday morning, was $1.56.9.

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Dan McTeague, president of Canadians for Affordable Energy, said there is still room for the price at the pumps to go down.

On Friday in Edmonton, McTeague said it’s costing gas stations about $1.38 per litre to buy their fuel.

“Anything above that, less GST, is called a retail margin,” he said. “They’re holding on to a 19-cent retail margin.

“Most gas stations across Canada get by quite well on eight to 10 cents a litre. That allows them to pay their bills, cover the cost of honouring credit cards, paying the electricity, their overhead, etc. Twenty cents a litre, folks, that’s pushing the envelope, that’s stretching it.”

McTeague anticipates another “dramatic drop” in wholesale prices on Saturday, because of the move by U.S. President Joe Biden to release one million barrels of oil per day from the nation’s strategic petroleum reserve in a bid to control energy prices.

“If we continue to see $1.58, $1.59 here in Edmonton, gas prices are going to be picking up what I think is a king’s ransom of 25 cents a litre as a retail margin. That is simply unacceptable,” McTeague said.

“I think gas stations are duty bound to curbing their enthusiasm, as it were, and ensuring that they’re not seen as the ones taking advantage of both consumers and now the public interest.”

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Many drivers were relieved as they pulled up to fill their tanks Friday morning.

“It’s much needed, definitely,” said Calgary driver Will Winship. “I do drive a truck but I’ve switched to driving my car just because of the gas prices.”

“It’s good,” said fellow driver James Cameron. “It’s not really a big deal to me because I don’t gas up very often. I just happened to be here this morning. I only gas up every six weeks or so, so it’s not a huge part of my budget but it’s good for other people.”

Read more: Carbon price rises to $50 a tonne, adds 2.2 cents to a litre of gas

The timing of the gas tax savings for Alberta drivers coincides with an increase to the federal carbon tax. Also Friday, the federal carbon tax increased 25 per cent, up to a total of $50 per tonne of emissions. At the pumps, that translated to about an extra 2.2 cents per litre of gas, hitting a total of 11 cents per litre.

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Kenney has long called on the federal government to halt its planned increase of the federal carbon tax. In a letter to the premiers of Alberta, Saskatchewan and Manitoba dated April 1, Federal Minister of Natural Resources Jonathan Wilkinson said the federal carbon pollution pricing system is working and the Government of Canada will continue to implement its plan.

“The carbon price’s goal is to reduce pollution — not to raise revenues. In jurisdictions where Canada’s pricing system applies, all of the proceeds are returned to the jurisdictions they came from. Temporarily suspending the pollution pricing system would actually deny Canadians of these crucial rebates that they use to make life more affordable.”

Click to play video: 'Alberta tax break on gas set to kick in' Alberta tax break on gas set to kick in

Alberta tax break on gas set to kick in

The Alberta gas tax will be removed on a sliding scale. When WTI oil is over US$90 per barrel, the tax will be removed. When the price is less than US$80 per barrel, the tax will be in full effect. The price of oil sat at about US$105 per barrel Thursday morning.

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The initiative will be put in place for the entirety of the 2022-23 fiscal year, but will be reassessed on July 1 and every quarter after that, Kenney said. It will also be looked at again before the government’s next budget.

Earlier this week, the premier said the province would be watching gas companies “like a hawk” to ensure they were passing the cost savings on to consumers.

Kenney, along with Finance Minister Travis Toews and Transportation Minister Rajan Sawhney, are scheduled to speak about the fuel tax consumer relief program at a news conference at 11:30 a.m.

© 2022 Global News, a division of Corus Entertainment Inc.

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