Manitoba drivers still get break as gas price fluctuates

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This article was published 31/01/2024 (624 days ago), so information in it may no longer be current.

Just one month after Manitobans rang in the new year with cheaper gas prices, thanks to a provincial fuel tax holiday, the price at the pump has jumped — and is expected to stay at that level.

On Jan. 1, gas prices dropped to $1.15 from $1.29 per litre in Winnipeg after the new NDP government suspended the 14 cent per litre provincial fuel tax.

On Wednesday, the average gas price increased to almost $1.22 a litre.

“Motorists are still getting a break,” said Patrick De Haan, a petroleum analyst for GasBuddy, a crowd-sourced website that monitors pump prices. Tax is just one of many things that can impact the price of gasoline, including the price of oil and the wholesale price of gasoline that’s gone up, he said.

Seasonal fluctuations also influence the price. For example, when temperatures start to go up, demand is likely to rise, as is the price, De Haan said.

At most of the big-name gas stations in Winnipeg Wednesday, gas cost $1.22 per litre. One station, the Canco convenience store on Isabel Street, was selling gas for $1.06 per litre.

De Haan said stations that sold at the higher price weren’t gouging customers. Instead, some retailers are likely selling at or below cost while others are trying to eke out a slight profit margin, he said.

Finance Minister Adrien Sala, whose Fuel Tax Amendment Act wiped out the 14-cent per litre levy on gasoline and diesel for the public and farmers until at least June 30, said it was a sound election promise — even if it cost $164 million in lost revenue as the province grapples with a $1.6-billion deficit.

“Gas prices are going to vary,” Sala said Wednesday. “We do know they’re much lower now than on Dec. 31.”

The New Democrats said the goal of suspending the fuel tax was to help Manitobans cope with high inflation. It’s estimated to save the average two-vehicle family $250 during the duration of the suspension.

Manitoba’s inflation rate was Canada’s lowest in December, at 1.7 per cent, before the tax was removed.

Sala said Wednesday Manitoba may extend the gas-tax holiday. For now, it’s helping to make life more affordable for people, businesses, municipalities and transit operations, he said.

At the time the gas tax holiday was announced, Premier Wab Kinew said he expected big-box stores — who blamed rising grocery prices on high transportation costs — to pass along gas tax savings to consumers.

When asked if there’s any evidence that has happened this month, Sala said “a lot of small businesses rely on vehicles… this has significantly lowered their costs,” and “we know that they’re hugely appreciative of this fuel tax holiday.”

Manitoba has consistently had some of the cheapest gas prices in the country since Jan. 1, he said.

On Wednesday, the average gas price in Canada was $1.44/litre, with Manitoba ($1.21) and Alberta ($1.22) paying the lowest average price and B.C. ($1.61) and Newfoundland ($1.65) paying the highest.

The Progressive Conservatives say the NDP government can — and should — bring more relief to people.

“Any type of measure to make life more affordable for Manitobans is a good move,” said interim leader Wayne Ewasko. “I’m not sure that it goes far enough,” he said about the gas tax holiday.

His party has called on the provincial government to oppose the federal carbon tax on natural gas for home heating that is set to increase April 1.

“The cheaper gas doesn’t necessarily make up for the carbon tax increase that we’re going to be getting,” Ewasko said.

On April 1, the federal carbon tax will increase to more than 17 cents per litre of gas and 15 cents per cubic metre of natural gas.

Sala said Wednesday the effect of the federal carbon tax hike will be taken into consideration when Manitoba decides if it will extend the provincial gas tax holiday.

“The increase in the carbon tax highlights the importance of us having brought in this holiday for folks,” Sala said. “The effects of that change will be accounted for as we make our decision on how to proceed on this.”

Middle- and low-income Manitobans will receive more in carbon tax rebates than they’ll pay in tax, said Jesse Hajer, an assistant economics professor at University of Manitoba.

The gas-tax holiday is a “wasteful” way to help those who most need it, said Hajer, who is opposed to extending it.

Historic data on average distance travelled and average fuel economy show the typical driver can be expected to save approximately $15 per month from the gas tax cut, he said.

“This is not nothing, but it’s unlikely that a $15 savings has made a big difference when it has come to dealing with the rising cost of living,” Hajer said.

“Historically, less than half of the fuel consumed in Manitoba (around 43 per cent) is bought by households, so this is more a business tax cut than a benefit for households.”

Hajer said there’s no guarantee corporations have passed on the savings.

The gas tax holiday benefits those who own vehicles rather than those who rely on public transit, he noted.

“Instead of tax cuts that give large amounts of money to corporations and high-income earners who have done very well over the last few years, they should be looking at targeted benefits for working- and middle-class households who actually need support.”

carol.sanders@freepress.mb.ca