Pump prices set to drop 11 cents on Canada Day as gas tax cut takes effect
Posted June 29, 2022 3:52 pm.
Last Updated June 30, 2022 11:47 am.
If you need to fill up your vehicle with gas ahead of the long weekend, you may save a few bucks waiting until Canada Day.
Roger McKnight, Chief Petroleum Analyst at En-Pro, tells CityNews the price at the pumps is expected to drop 11 cents on Friday at most GTA stations to an average price of 193.9 cents/litre.
McKnight says this is due to a combination of a 5.7-cent-per-litre cut to the Ontario gas tax, which will go into effect on Canada Day, and a drop in wholesale prices.
Premier Doug Ford confirmed Thursday his government will lower the gas tax by 5.7 cents per litre and the fuel tax, which covers diesel, by 5.3 cents until the end of December.
“The reality is that people simply cant’ afford the price of gas right now,” said Ford, who claimed that the reduction – along with the elimination of license plate renewal fees – would add up to $465 in savings this year for a household that owns a vehicle.
Ford also called on the federal government to step up and temporarily remove the 11 cent per litre carbon tax to help further bring the price down.
“Just imagine if we could knock down the prices by 20-some odd cents,” said Ford. “They could do it temporarily. If they want to do it through the peak areas of the summer or up to the end of the year, that’s how you put real money into people’s pockets.”
McKnight calls the upcoming tax cut an overdue “Band-Aid solution” but consumers will likely see some benefit in its early days.
The combination of a 5.7 cent per litre cut in the Ontario gas tax effective Friday July 1, and a fall in the U.S. cash futures prices means pump prices should fall by 11 cents per litre on Friday, July 1.
— Roger McKnight (@RogerMcKnight) June 30, 2022
There have only been two days in June where gas prices have been below $2/litre.
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The drop in wholesale prices can be attributed to an increase in U.S. inventory and a slowdown of the U.S.’s demand for gas, diesel and jet fuel.
Meanwhile, an increase in production of crude by OPEC oil cartel and allied producing nations to 648,000 barrels per day in August will likely do little to relieve high gasoline prices at the pump and energy-fueled inflation plaguing the global economy.
While OPEC could help lower prices by increasing production – in theory – many oil-producing countries are struggling to produce as much as the group’s decisions set out.
Ontarians will also be getting more money from the federal government’s carbon-price rebate cheques to combat the high price of gas.
For the first time, the payments will come quarterly, rather than hidden as a lump sum in annual tax-return deposits. The first cheques in 2022 will be a double payment for two quarters in July, followed by quarterly payments in September and January 2023.
With files from Michael Ranger and The Canadian Press
