Oil prices have to drop this low for the Alberta gas tax relief to disappear

Aug 5 2022, 4:26 pm

Gas prices in Alberta continue to decline, and it’s got us wondering what needs to happen for the gas tax in the province to disappear.

Back in April, the Alberta government suspended the gas tax collection, reducing the price at the pump by 13 cents per litre as motorists struggled with rising gas prices alongside record-setting inflation.

The government will review the collection of the fuel tax on a quarterly basis and, if required, consider reinstating collection in stages. The government will not start to reinstate collection before October 1, 2022.

Alberta’s fuel tax will not be re-implemented unless the average price of West Texas Intermediate (WTI) falls below $90 per barrel, according to the province.

What the fuel tax collection reinstatement will look like

When WTI prices are $90 or more, the fuel tax collection is paused, and the fuel tax rate is zero cents per litre.

When they drop to $85 to $89.99, the fuel tax will be reinstated partially and the fuel tax rate will be 4.5 cents per litre. The partial reinstatement continues if prices fall to the $80 and $84.99 range, with the fuel tax rate clocking in at nine cents per litre.

If WTI oil prices plummet to $79.99 or less, the fuel tax will be reinstated in full, and Albertans can say goodbye to the fuel 13 cents per litre relief.

“The government will review WTI prices in mid-September and provide another update before the start of the next quarter (on October 1),” the province added.

Alberta’s fuel tax is applied to purchases of fuel, including gasoline, diesel, propane (for motive purposes), aviation fuel, locomotive fuel and renewable fuels.

Early last month the province also brought in more inflation relief plans, touting that the electricity rebate program will be extended until December, offering Albertans $300 in rebates.

Since the program began, eligible Albertans will net a monthly $50 bill credit for six consecutive months.

Laine MitchellLaine Mitchell

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