Dra­matic an­nual spike in gaso­line price driv­ing higher cost of liv­ing in Cal­gary

Calgary Herald - - FRONT PAGE - SAMMY HUDES

Higher oil re­fin­ery prof­its and an in­crease in the pro­vin­cial car­bon tax were both key to a 21 per cent spike in the price of gaso­line in Cal­gary com­pared with a year ago, an an­a­lyst says.

That jump is the big­gest of any item in­cluded in the City of Cal­gary’s In­fla­tion Re­view re­port for Au­gust, which com­pared price in­fla­tion since the same time last year.

The re­port, pub­lished Fri­day, shows head­line in­fla­tion in Cal­gary rose to 2.26 per cent as of last month, com­pared to Au­gust 2017.

That was slightly lower than the pro­vin­cial in­fla­tion fig­ure but higher than the na­tional rate of 2.15 per cent. Head­line in­fla­tion is the rate mea­sured us­ing all com­po­nents of the con­sumer bas­ket of goods and ser­vices.

Food is about 1.5 per cent more ex­pen­sive than it was about a year ago, while the cost of shel­ter rose about 1.7 per cent. But gaso­line rose more than 21 per cent since last year, con­tribut­ing to a nearly six-per-cent in­crease in the cost of trans­porta­tion as a whole.

Dan McTeague, a se­nior petroleum an­a­lyst with GasBuddy.com, said in­fla­tion has hit Cal­gary’s gas prices harder than other cities across Canada. At about $1.336 per litre, he said gas prices in Cal­gary have risen 29 cents on av­er­age since last year, when they sat around $1.04 per litre.

“The in­creases have been no­tice­able and they’re cer­tainly there,” said McTeague, who at­trib­uted an in­crease in re­fin­ery prof­its for nearly one-third of that spike.

“Re­fin­ers are pick­ing up about nine cents a litre, net, more than they were at this time last year,” he said.

The price of oil is also a ma­jor fac­tor, McTeague added, not­ing the cost of a bar­rel has risen from $49 to $70 since one year ago.

“Mul­ti­plied by the weak­ness in the Cana­dian dol­lar that’s prob­a­bly ac­count­able, you’re look­ing at an av­er­age of about an­other nine to 10 cents a litre,” McTeague said.

Other cities have also seen a rise in the price of gas since last year, in­clud­ing Ed­mon­ton, where gas is about 32 cents more ex­pen­sive than it was at this time last year.

Win­nipeg, Regina and Saska­toon have all seen a 24-cent jump, roughly, while the price has risen about 15 cents in Toronto, Mon­treal and Van­cou­ver, ac­cord­ing to McTeague.

He said an ad­di­tional fac­tor fac­ing Al­ber­tans is the car­bon tax in­crease that came into ef­fect at the be­gin­ning of 2018.

The car­bon levy in­creased to $30 per tonne of car­bon diox­ide emis­sions from $20 per tonne, the price im­ple­mented in 2017. That meant the tax on gaso­line rose from 4.49 cents per litre to 6.73 cents per litre.

About 60 per cent of Al­ber­tans were to re­ceive a full re­bate to cover added ex­penses, such as a nearly 2.5-cent cost in­crease that was ex­pected at the pumps.

McTeague said the move could be re­spon­si­ble for an ad­di­tional 10 to 12 cents per litre in the cost of gas in Cal­gary.

“The car­bon tax has a lot to do with the in­crease,” he said.

Uni­ver­sity of Cal­gary econ­o­mist Trevor Tombe said Al­berta’s in­fla­tion rate is in line with other prov­inces as the Bank of Canada seeks to en­sure in­fla­tion na­tion­ally re­mains be­tween one and three per cent per year.

Other items that have seen a rise in cost since last year, ac­cord­ing to the City of Cal­gary’s re­port, in­clude wa­ter, fuel and elec­tric­ity (5.61 per cent), health and per­sonal care (2.33 per cent) and al­co­holic bev­er­ages and to­bacco prod­ucts (3.13 per cent).

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