Central Albertans have noticed a significant drop at the pumps this week, due to the pause in the 17.6-cent-per-litre carbon tax which went into effect April 1.
Some stations in Red Deer were as low as 123.9 cents per litre on Wednesday morning.
According to Patrick De Haan, GasBuddy's head of petroleum analysis, Alberta’s gas prices are down, on average, about nine cents per litre from one week ago.
He notes that prices were trending upwards prior to the carbon tax pause, which is typical for this time of year.
"Gas prices had been trending up because of the changeover from winter to summer gasoline, along with rising demand as temperatures warm up and Canadians get outside more," explained De Haan.
Refineries are also undergoing maintenance before the start of summer.
He says Canadians will save hundreds of dollars over the course of the year due to lower gas prices.
Enjoy the lower gas prices while you can
De Haan notes that while Central Alberta is enjoying a one-time significant drop in gas prices, this will not prevent prices from inching higher in the future.
"By later this year, when prices start to trend lower, we could see some of the lowest gas prices provincially since the start of the COVID-19 pandemic," he said.
He expects refineries to finish their maintenance by early May and start boosting the supply of gasoline. The transition to summer gasoline should also be complete by that time.
There is also a chance that with an election on the horizon, the carbon tax could make a return.
"Enjoy the relief for now, as we’re not sure how permanent it will be," he said.
Why is there such a discrepancy in prices across Central Alberta?
Central Albertans often notice a discrepancy in gas prices between various communities.
De Haan explains this could be due to price cycling, where stations gradually lower prices over time.
They then reset their margins to normal levels, which can lead to significant price volatility, with stations differing by up to 10 cents per litre, depending on where they are in the price-cycling phase.
Diesel prices are also dropping
The average price for diesel in Alberta has also decreased by about eight cents per litre, with De Haan expecting prices to continue to move in that direction.
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