Nfld. & Labrador

'It's alarming': Taxi driver braces for big bills as province approves gas tax hike

The days of of Newfoundlanders and Labradorians benefiting from plummeting oil prices at the gas pump are numbered.

With passing of Bill 20, the provincial sales tax on gas will go from 16.5 cents to 33 cents.

The provincial government passed Bill 20 on Wednesday, clearing the way for a doubling of the provincial sales tax on gas to 33 cents per litre. (Mark Quinn/CBC)

The days of Newfoundlanders and Labradorians benefiting at the gas pumps because of plunging oil prices are numbered. 

The provincial government passed a bill on Wednesday that will see the provincial sales tax on gasoline double.

With the passing of Bill 20, the 16.5 cents per litre in provincial sales tax that people already pay on gas will double to 33 cents per litre.

It's hard to say exactly what people will pay for a fill up when the increase goes into effect on June 2, but former MHA and taxi driver George Murphy says we'll all feel the pinch. 

"It's alarming, it really is," he said.

The tax increases don't end in June either.  A two per cent HST increase coming in July will likely raise fuel prices higher again. 

George Murphy says the provincial gas tax increase will deal a blow to people's disposable income. (Mark Quinn/CBC)

"I've been watching big oil for the last 19 years now, I never thought I'd have to be watching government," said Murphy, who now makes his living with Jiffy Cabs in St. John's.

Murphy said the higher tax on gasoline will affect the livelihood of many people in the province and force them to rein in their spending. 

"It's certainly going to mean the loss of a lot of disposable income out there in the economy," he said.

"If you are going to buy 60 litres of fuel, it's going to cost you an extra 12 bucks."

Highest in country, he predicts

As a longtime cab driver, Murphy said he's seen the profession go through rough patches over the years. 

He thinks that if the trend continues, the province could see gas prices rise to where they were before the oil boom went bust.  

"We're going to be the highest priced province for gasoline in this country," he said. 

But even though he's not happy about the increase, he said he's going to have to take it on the chin anyway.

"The simple fact is that we drive some distance to get to work," he said.

"We commute. We're not centred like Toronto and we probably never will be."

With files from Mark Quinn