As oil prices fall, what happens to Alberta’s gas tax relief plan?

As Alberta drivers get set to head out for another summer weekend, prices at the gas pumps are trending down.

On Friday afternoon, most stations in Edmonton had pump prices around 157.9 cents per litre, with at least one station charging as low as 136.9 cents per litre.

This continues a trend that has been unfolding for several weeks.

On July 19, pump prices for regular in Edmonton averaged 181.6 cents per litre, in Calgary the average price was 186.1 and in Lethbridge it was 188.9 cents per litre.

2:05 Gas prices drop as Alberta stops collecting gas tax

Part of the reason for the falling price is a corresponding drop in world oil prices.

For the first time since February, the price of West Texas Intermediate dipped below $90 USD per barrel in trading this week. The price has been trending down since early June, when WTI topped $120 USD per barrel.

Alberta’s current gas tax relief plan is tied to the price of oil, and $90 USD WTI is one of the thresholds. The discount is reviewed quarterly, and is locked in until at least the end of September. For the relief to be changed, the government says the price of WTI would need to average below $90 USD for the entire quarter, and there are four tiers.

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If WTI averages above $90 USD, the full 13 cents is removed from the price at the pump. If WTI averages between $85 USD and $89.99 USD, the fuel tax would be set at 4.5 cents per litre. If WTI averages between $80 USD and $84.99 USD, the fuel tax would be set at 9 cents per litre. Any price below $80 USD would see the full reinstatement of the 13 cents per litre.

2:49 Gas prices drop as Alberta government stops collecting gas tax

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