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Alberta drops tax on fuel at pumps, for now

Drivers can expect some short-term relief in gasoline prices in Alberta, starting today.

Premier Jason Kenney, along with Minister of Finance Travis Toews, and Minister of Transportation Rajan Sawhney announced the temporary pause on the provincial fuel tax on Friday.

The fuel tax was set at $0.13 per litre for gasoline and disel, and $0.04 per litre for marked fuel.

The government has claimed that this will result savings for a tank of gas between $6.80 for compact cars and $18.50 for a large pickup, up to $185.50 for a semi-trailer.

“Global realities are impacting Albertans directly as inflation pressures continue to drive up the cost of living,” said Minister Toews.

“We recognize the significance of the challenges Albertans are facing and by pausing the collection of the fuel tax, we’re making life in Alberta more affordable.”

Prices at the Co-op gas bar, where the Premier held his announcement, dropped from $1.679 per litre to $1.566. That was an 11 cent savings.

Premier Kenney credited the overnight to the removal of removal of the tax at the pump.

UCalgary economist Trevor Tombe said on Twitter Friday, that provincially the drop in gasoline prices was 8 cents per litre.

Transportation and energy inflation outpaces other items

According to the Government of Alberta, the consumer price index for energy increased by 31.3 per cent from February 2021 to February 2022. CPI for transportation increased by 10.1 per cent for the same period.

Food and shelter increased by 6.2 per cent and 6.6 per cent.

The Premier claimed that on an annual basis the removal of the tax would be a $1.4 billion tax savings for Albertans.

Minister Toews said that the province would be monitoring gas stations to ensure the savings were passed on to consumers, but stopped short of saying there would be penalties if they didn’t. He said that competition would weed out stations that sell for higher prices than their competitors.

“Ultimately those who don’t pass along the savings won’t be selling gas, that that will be the reality.”