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Manitoba still in gas tax holiday, and prices are… high? Expert explains

Manitoban drivers may be experiencing some sticker shock at the pumps as gas prices continue to climb despite the gas tax holiday.

On Jan. 1, the Manitoba government cut provincial tax on gas costs, bringing prices down by 14 cents a litre. At the beginning, this saw prices hovering around $1.15 a litre, but GasBuddy reports that before noon on Leap Day, prices touched $1.32.

GasBuddy reports that before noon on Leap Day, prices touched $1.32.
GasBuddy reports that before noon on Leap Day, prices touched $1.32. Screen capture from GasBuddy

Patrick De Haan, head of petroleum analysis at GasBuddy, told 680CJOB the rise is not shocking, as it happens every year.

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“What’s going on coast to coast right now is seasonal in nature. We’ve made the first step towards summer gasoline, and Canada echoes much of the United States markets, which have made the first step as of about a week ago. As we start to get closer to that summer blend of gasoline, prices go up,” he said.

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“Summer gasoline, or this transitory type of fuel that we use for about a month, is in limited supply,” he said, contributing to the hike.

De Haan said refineries are also starting their yearly maintenance ahead of the busy summer season.

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“It’s culminating in price pressures as demand is also starting to go up seasonally, and that’s culminated in prices jumping over the last month. Unfortunately, it’s a trend that will likely continue,” he said, adding that prices could climb another 10 cents over the next few weeks.

He said since the start of the year, Manitoba gas prices are up 10 cents a litre, and up seven cents from a week ago. “That’s one of the higher jumps,” he said in an interview with Global News.

But, Manitoba is still down 18 cents from a year ago, he said.

“Manitoba is still the cheapest province by quite a good measure,” De Haan said, adding Saskatchewan is at about $1.47 a litre, B.C. is up to $1.70, and Alberta is just slightly behind Manitoba at $1.37.

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Once the gas tax holiday is over, “it’s going to be a fairly swift 14 cent a litre jump,” he said, adding when that happens, Manitoba likely won’t keep it’s standing as the cheapest province.

“But, hopefully by June we will have seen prices plateau and there could be inching down, with the exception of when the end of that gas tax break kicks in. Then we’ll see prices jumping,” he said.

That leap will most likely be seen at the retail level within 48 to 72 hours, he said.

But not all is loss. “When we start to talk about cooler weather and the change back to winter gasoline, we’ll see these prices come back,” De Haan said, with prices maybe dropping to around $1.30 without the gas tax slash by the end of 2024.

“So long as there aren’t things like major hurricanes or disruptions in the Middle East. (There’s) always caveats. We don’t have a crystal ball. But, if we can avoid those types of unexpected disruptions, I do think there’s a good chance that we will see gas bars below $1.30,” he said.

Click to play video: 'Mixed feelings as Manitoba’s gas tax holiday begins'

Mixed feelings as Manitoba’s gas tax holiday begins

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