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Lower oil prices mean Alberta’s fuel tax is coming back New Year’s Day

Starting Jan. 1, 2024, the Alberta fuel tax is returning.

Alberta’s current gas tax relief plan is tied to the price of oil, and $90 USD WTI is one of the thresholds. The discount is reviewed quarterly. For the relief to be changed, the government says the  WTI would need to average below $90 USD for the entire quarter, and there are four tiers.

“Here’s the deal we had with Albertans,” Premier Danielle Smith explained in an interview with 630CHED’s Shaye Ganam on Thursday.

“When we’re making a lot of money from resource revenues, we’re going to make sure that we’re reducing the cost on them from the fuel tax. So, the program we have in place is when oil and gas is over $90, there will be no fuel tax. When it’s under $80 — and we’re talking West Texas Intermediate — then the tax comes back,” the premier said.

“As you’ve seen, we’ve had a lot of uncertainty around our oil prices. I think they dipped below $70 going back a little bit,” she said Thursday.

“We need to make sure we’re managing our revenues for the long term. I can tell you my finance minister is gravely concerned with these softening prices.

“We have more people coming into the province. We need to build more schools, more hospitals, we need to make sure that we’re hiring enough doctors, nurses. And we can’t keep on cutting our long-term dependable revenue sources.

“So because oil is now below $80, we figured that this was the time to return to that program, but if it goes back up to $90, we’ll take it off again.

“We’ve made that program permanent. So people will be able to get that break depending on what our oil prices are,” Smith said.

Under the Alberta program, if WTI averages above $90 USD, the full 13 cents is removed from the price at the pump. If WTI averages between $85 USD and $89.99 USD, the fuel tax would be set at 4.5 cents per litre. If WTI averages between $80 USD and $84.99 USD, the fuel tax would be set at nine cents per litre. Any price below $80 USD would see the full reinstatement of the 13 cents per litre.

“The biggest thing we need to do is to stop the federal government to stop levying, increasing taxes on us,” Smith said. “Not only do they have the fuel tax, but they also have the carbon tax.”

The Opposition NDP says this move shows where the UCP’s priorities are.

“While most Albertans are struggling to afford the basics, while provincial coffers fill with oil revenues, the UCP need to pay for their promises to create more cushy board jobs and fill them with their friends at increased salaries,” Kathleen Ganley said.

“In a province grappling with escalating rents, a housing affordability crisis, high grocery bills, and rising power prices, the UCP are focused not on how to help Alberta families, but on how to help themselves.”

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