Lower gas prices may be coming to an end - just like 2023

While Airdronians may be rushing to fill up today, with gas prices having dropped a few cents since the end of last week, all good things must come to an end. It is likely that come January 1, 2024, the pause on the provincial fuel tax will be ending.

Timeline

The province instituted the pause on the fuel tax back in April 2022, when Premier Jason Kenney was still in power. The pause meant that Albertans would not be paying the 13-cent provincial fuel tax on every litre of gasoline they purchased. The initial pause was meant to last until at least the end of June 2022.

"The government will consider the future of the tax, based on a sliding scale of the price of West Texas Intermediate (WTI) crude," the government previously stated in 2022.

• In June 2022, the government announced the pause on the provincial fuel tax would be extended until September.
• In September 2022, the province announced that in October 2022, they would partially be reinstating the fuel tax.

“Albertans will save 8.5 cents on every litre of gas and diesel every time they fill up at the pump," stated then President of Treasury Board and Minister of Finance, Travis Toews.

“Earlier this year, Alberta’s government introduced the fuel tax relief program to help Albertans deal with higher fuel costs. The program continues to provide fuel tax savings as long as the average price of WTI is above US$79.99 per barrel."

• Toews would issue another update in December 2022, stating that the full pause on the fuel tax would begin again in early 2023.

"Starting January 1, 2023, Alberta will be suspending the full provincial fuel tax for six months. This means that Albertans will save 13 cents per litre on gasoline and diesel from January to June."

He added that in July 2023, the program will return to the current system of providing fuel tax relief based on the price of West Texas Intermediate (WTI) oil.

"This system will then remain in place permanently."

In June 2023, under the leadership of Premier Danielle Smith, the province announced that the full 13-cent pause would continue until December 31, 2023.

"Alberta’s oil price-based fuel tax relief program will resume in 2024. The program saves Albertans some or all of the provincial fuel tax when average WTI prices exceed legislated thresholds," the province added.

According to the province's calculations, the WTI price (average per barrel) would have to be at $90 or more for the fuel tax collection paused, while $85 to $89.99 would mean a partial reinstatement of the fuel tax at 4.5 cents/litre.

$80 to $84.99 for the WTI would mean that the fuel tax would also be partially reinstated at 9 cents/litre, while $79.99 or less would mean a full reinstatement of the 13-cent/ litre tax. 

However, the province underlined that the WTI price average is based on the 20 trading days of price data leading up to the 15th of the month preceding the start of the next quarter.

"When reinstating the tax, the program limits the increase in tax from one quarter to the next to nine cents per litre to reduce price shock to consumers."

As of Monday, December 11, the WTI was trading at $70.99. 

Alberta continues to see the lowest gas prices across the country, with an average of $1.24 for a litre of regular gas. In comparison, motorists in Saskatchewan are paying upwards of $1.36 for gas, while those living in British Columbia pay the highest price, at $1.65 per litre for gas. 

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