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Gas prices dropped Thursday at pumps across Newfoundland and Labrador. (CBC )

While gas prices have been spiking in central Canada, Newfoundland and Labrador's fuels regulator instructed retailers Thursday to cut prices, even though the relief may be short-lived.

The Public Utilities Board lowered the maximum allowed price for all grades of gasoline by 3.4 or 3.5 cents a litre, with the difference due to rounding for taxes in different parts of the province.

The new setting means a litre of self-serve unleaded gas on the Avalon Peninsula, where prices are cheapest, can now sell for no more than $1.373. Some retailers charge less to lure customers.

Those are the lowest prices since mid-April, and mark the first significant drop since the cost of gas started soaring in February. Consumers still are paying about 23 cents per litre more than they were one year ago.

The PUB used pricing data through this Tuesday while making the decision. That means last week's dramatic drop in the price of oil was incorporated.

Gas prices this week, though, have risen sharply in unregulated jurisdictions, which may play into next week's setting.

Consumer George Murphy said before this week's setting that he expected local gas prices to drop around three cents this week, but to increase by almost six cents per litre next week.

Truckers and other motorists who depend on diesel will also see cheaper bills at the checkout. The PUB lowered the price of diesel fuel by as much as 7.7 cents per litre in Newfoundland and as much as 7.3 cents per litre in Labrador.

Most types of home-heating fuel dropped, as well. The cost of both furnace oil and stove oil dropped by 6.79 cents per litre.

Propane fuel, though, was up by 2.2 cents per litre.

The PUB has been regulated fuel prices in Newfoundland and Labrador since 2001.

The chart below shows how average gas prices in Newfoundland and Labrador have changed over the last 12 months, compared to both changes in the national average for gas prices and the global price of oil.