(CJME News staff)

By Drew Stremick/ CJME News

Increased carbon tax pushes up prices at the pump

Apr 4, 2022 | 12:17 PM

The federal carbon tax increased to $50 per tonne Friday, and that pushed up the price of gas in Saskatchewan.

Roger McKnight, a petroleum analyst with En-Pro International, said the carbon tax now represents 11 cents per litre for gas and roughly 13 cents per litre for diesel.

While the carbon tax represents just over six per cent of the price of gas right now (currently at $1.70 per litre depending where you live in the province), McKnight says the reason gas prices are so high is because of a big spike in demand.

“The supply side for crude is very, very tight, and the demand side for gasoline and diesel is very high, so we have an imbalance of supply and demand. The teeter-totter is way out of ‘totter,’ and that’s what is driving prices to a certain degree,” McKnight said.

“The other side is the Russia-Ukraine situation, which has made the crude supply side even tighter.”

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One major factor in the increase in demand, according to McKnight, is the fact that many provinces are lifting the remainder of their COVID-19 public health measures.

“We’re theoretically out of the COVID situation, so people have decided to get out of their basements, get out of their living rooms to peek out the curtains and decide they want to get on the road again, back to work or to the airport to get out of the country and travel again,” he said.

All these factors have led to the record prices we’ve seen across the province, and McKnight doesn’t think there will be much stability for the next few months.

“The next two months, you’re going to see prices go up and down very radically, until the situation in Ukraine is resolved,” McKnight said. “President (Joe) Biden has dipped into strategic petroleum reserve for a million barrels of crude a day, which probably won’t do much.”

Some provinces like Alberta have temporarily stopped collecting their provincial fuel tax to help lessen the pain felt on pocketbooks, but Premier Scott Moe has ruled that possibility out here in Saskatchewan.