Nfld. & Labrador

Gas prices soar in N.L. as much-dreaded tax hike takes effect

The cost of gasoline jumped dramatically Thursday morning in Newfoundland and Labrador, as a controversial new government tax kicked in.
The Liberals announced a new 16.5 gas tax in its April budget. With HST, the new tax effectively means an extra 18.65 cents for every litre sold. (Michelle Siu/Canadian Press)

The cost of gasoline jumped dramatically Thursday morning in Newfoundland and Labrador, as a controversial tax hike kicked in and consumer anger kicked up. 

Gas prices jumped 18.65 cents a litre after the doubling of the provincial tax and additional HST and a small adjustment in maximum prices allowed by the Public Utilities Board.

Many drivers had gassed up ahead of the hike.

Consumers turned out in droves on Wednesday to fill up their tanks — not to mention jerry cans — before the new tax took effect. 

Gas dependent industries  

For taxi driver Doug McCarthy, filling up a tank of gas has become noticeably more expensive

He gases up four times a week. As of Wednesday, filling his 60L tank ran him $68.34. Now, with the additional tax, he says it's closer to $79.44. That's a difference of $11.10 a fill up or, in his case. $177.60 a month. 

"But it's just not the taxi industry. It's any industry that deals in transportation," he said.

"I mean those costs are going to be passed onto the consumer.... It's going to have a net negative impact on the entire province."

'A continuous flow'

Maurice Simmons, who owns two gas bars in St. Anthony, said Wednesday was a hectic day for him.

"I guess it was probably about three times busier than it would be on a normal day," he told the Corner Brook Morning Show.

"By noon we had a regular day's volume gone through and it just continued to be a continuous flow." 

Simmons said people were filling up their vehicles and any containers they legally could. He brought in extra staff to help keep the process moving along. 

Customers grumbled about the upcoming hike, Simmons said, but he thinks people will ultimately be able to cope with the situation. 

"You know, it was only a couple of years ago when gas was $1.54 to $1.55." 

He said higher prices at the pumps will have an impact on people financially, especially those on a fixed income, but, "this is it," he said. "We have to put up with it." 

Some people will conserve, he thinks, but Simmons doesn't believe his gas stations on the Northern Peninsula will lose too much business. 

"It's going to be a couple of days before people burn the gas that they have," he said.

"It'll be back on stream within a few days I'm sure."

Highest prices since 2014

Thursday's price setting reflected a slight softening in gas markets. Indeed, prices would have dropped about 0.85 cents a litre if the new tax did not exist. 

However, pump prices are still the highest since October 2014, before oil prices collapsed. 

On the Avalon Peninsula, where gas prices are cheapest, the maximum price for a litre of self-serve gas is now $1.32. 

Gas is more expensive in other pricing zones, with a litre going for $1.398 in Churchill Falls, $1.327 in Corner Brook and $1.485 in southern Labrador. 

Meanwhile, diesel jumped 6.1 cents per litre this morning. 

Home-heating fuel changed marginally, with an increase of 0.32 cents per litre. 

Price trend

The following chart shows the recent trend in average gas prices in the province, as reported by individual consumers through GasBuddy.com. [Not seeing the chart on a mobile device? Click here to start navigating.] 

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