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Gas prices soar in Newfoundland and Labrador as new tax comes into effect

Click to play video: 'Newfoundland & Labrador drivers hit with record gas price hike' Newfoundland & Labrador drivers hit with record gas price hike
WATCH ABOVE: The price of gas jumped overnight to about 18 cents a litre in Newfoundland and Labrador. Ross Lord looks at what fuelled the increase, and how drivers are coping – Jun 2, 2016

Residents in Newfoundland and Labrador got a jolt at the pumps Thursday as the cost of gas rose sharply overnight thanks mostly to a new tax.

Gas prices soared, as the provincial tax on gasoline effectively doubled from 16.5 to 33 cents per litre. With HST added, the overnight increase was around 20 cents per litre.

The new tax pushed the price of gas to its highest point since before the collapse of oil prices in October 2014.

READ MORE: Blame Canada, Nigeria: Oil prices hit 6-month highs

According to gasbuddy.com, prices were highest in the Happy Valley-Goose Bay area where the price for a litre of self-serve gas was $1.357. The cheapest places to fill-up were in Torbay and St. John’s where gas was $1.089 per litre.

“People will have to make other arrangements to ensure they are carrying a bit more cash or extend their credit or ensure they have enough on their Visa to pay for gasoline,” said Dan McTeague, a senior petroleum analyst at GasBuddy.com. “Newfoundland is now home to the most expensive gasoline in North America and likely the Western Hemisphere.”

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“These are dire straits for the people of Newfoundland,” McTeague added. “It goes to show you how the collapse in crude prices has affected not just Alberta but Newfoundland and Labrador too.”

The controversial gas tax was part of the Liberals’ April budget that included a 16.5-cent a litre gas tax.

READ MORE: Should Canadians be cheering for lower or higher oil prices?

Paddy Daly, VOCM radio host, said the public backlash over the hike in prices will be especially strong as the summer and tourist seasons get underway.

“The pressure on government is only gonna amp up, as the weeks and months go by here, for tourist season, and knowing that every time you go to the gas pumps, is yet another gouge, and people are furious,” he told Global News.

“[The Liberals] campaigned on things they could not possibly live up to, and as a result, the emotions [from the public] are pushing back.”
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Drivers rushed to gas stations on Wednesday to fill up their tanks before the new tax took effect.

*With files from Ross Lord

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