At the start of 2024, Albertans may be paying a bit more when they fill up at the pumps.
The province’s fuel tax exemption, which was first introduced in 2022, is set to expire at the end of December. However, drivers are already feeling the pain at the pumps.
“I’ve been here in Canada for like 12 years now. Prices of gas are really high, (not) like before,” said Alexis Dimaculangan.
If the fuel tax exemption is lifted in the new year, prices may be even higher.
“With rent and cost of living, and then gas as well, I can definitely see the pain coming for people and it’s unfortunate,” said Jeff Lewis.
In April 2022, the provincial government stopped collecting the 13 cents per litre gas tax to combat rising prices. It was paused for six months at the start of 2023, but then extended until December.
“We felt it was important for affordability reasons to extend that fuel tax reprieve for an extra six months,” said Premier Danielle Smith on Corus Radio’s Your Province. Your Premier. on Nov. 18. Global News is owned by Corus.
However, Smith has now hinted the tax may return.
“In the new year, if these prices continue to be moderate like this, we will be bringing the fuel tax back, yes,” Smith added.
In January, any fuel tax relief will be based on averages of oil prices. If the West Texas Intermediate (WTI) price is more than $90 per barrel, there will be no fuel tax.
Between $89 to $85 per barrel, we’ll pay a 4.5 cents per litre tax. From $84.99 to $80 there is a partial collection of 9 cents per litre.
If the price is $79.99 or less per barrel, drivers will pay the full 13 cents per litre. As of Friday, WTI was trading at around $75.
However, one economics professor said taxes are just one factor influencing overall prices.
“We often see that the prices don’t go down as much as people would think, but we do hear about record profits that come out of gas stations. So somehow there’s a magic here that in this sort of policy it doesn’t really trickle down to the consumer,” said Moshe Lander, of Concordia University’s department of economics.
But Lander said the discussion likely isn’t over and bringing a tax back might be difficult politics.
“I think that they recognize here that it’s a political calculus that’s at play, more than it is some sort of financial or economic calculus,” Lander said.
Drivers said they hope the province has another change of heart before the new year.
“Unbearable. There are no words to explain. They should think about the common man,” said Davinder Bindra.