Alberta drops gas prices by more than 10 cents thanks to province's fuel tax strategy

Filling up your gas tank just got noticeably cheaper for Alberta drivers despite the latest hike to the federal carbon tax.

Many gas stations in Calgary lowered their prices by 10 to 13 cents overnight, largely thanks to the provincial government's decision to temporarily pause its 13 cent-per-litre gas tax.

That overnight dip from an average of around $1.67 per litre to about $1.55 means the average gas tank of roughly 60 litres will cost about $7.20 less to fill.

A similar price reduction took place in Edmonton overnight, with an average litre of regular grade gas going for $1.55 compared to $1.65 Thursday.

Premier Jason Kenney, speaking from a Calgary gas station on Friday, said the relief comes "when Albertans need it most."

"We are living through 30-year-high inflation," he said. "Alberta's government has listened to Albertans who are saying we need to take real action to reduce the cost of living."

However, while his government's action does have an actual effect on Alberta's gas prices, Kenney said the federal government is still hurting taxpayers by hiking the carbon tax.

"They want to punish Canadians for filling up their gas tanks, heating their homes, turning on the electricity and living normal lives.

"By contrast, Alberta's government is taking real action by saving people money, to put more jingle in their jeans, to let them keep more of their hard-earned cash."

It's not just regular Albertans who will be helped by the temporary drop of the fuel tax.

Alberta Finance Minister Travis Toews says businesses and municipalities will also be able to benefit with cost savings on their fleets of vehicles, but it doesn't stop there.

"Businesses will be relieved of cost pressures associated with transported goods such as clothing, groceries and other essential items, in turn reducing the need for them to increase prices for Alberta consumers."

Toews says the government plans to revisit the strategy to drop the fuel tax, which is only in effect when the price of West Texas Intermediate (WTI) oil is $80 per barrel or above, on a quarterly basis.

PRICES STILL 'SKY-HIGH'

Calgary prices are still well above the $1.20 per litre average from this time last year. With so much uncertainty in the global energy market, experts say there is a chance that these lower-than-yesterday prices won't last long.

"We might still see higher pricing at the pump," said Vijay Muralidharan, a lead fuel and alternative fuel consultant with Kalibrate. "That's not because the tax has not been passed through. That's because the crude pricing and the refinery margins are still sky-high."

He adds that there are still several other variables that could keep gas prices high, including the start of the driving season in North America, which normally leads to an increase of around 10 cents per litre around this time of year.

Despite the province's temporary removal of its gas tax, consumers are still at the mercy of gas companies who can set their own prices as they see fit. The province plans to review its removal of the provincial gas tax in three months to see if should be reinstated.

Officials are also watching to see if the price of WTI will dip below $80 per barrel.