CALGARY — On Monday, oil prices surged to $119 a barrel for the first time in more than three and a half years as the Iran conflict continues to escalate, disrupting production and shipping in the region, and Albertans are unlikely to see any relief at the gas pumps for the time being.West Texas Intermediate (WTI) crude settled to just over US$101 per barrel on Monday, while Western Canadian Select (WCS) was trading at US$78.55 at the time of writing.Premier Danielle Smith says that despite the price surge, the province is unlikely to suspend Alberta’s 13-cent-per-litre fuel tax in the short term as the program is based on a quarterly average rather than short-term price spikes.Speaking on her Saturday radio show, Your Province, Your Premier, Smith said the recent jump in prices came too late to affect the next scheduled adjustment.“We’re coming to the end of this first quarter where we do that assessment. This jump happened too late so it wouldn’t qualify for April 1,” Smith said.“But we’d be looking at seeing if we would make the adjustment if these prices hold.”Under Alberta’s fuel tax relief program, the provincial fuel tax changes depending on the average price of WTI crude.The program reduces or eliminates the provincial fuel tax when oil prices remain high, normally sitting at 13 cents per litre on diesel and gasoline.When WTI reaches $90 per barrel or higher, the province fully suspends the 13-cent-per-litre fuel tax..Industrial carbon taxes, fuel rules still drive up costs for Canadians.If prices fall between $85 and $89.99 per barrel, the tax is reduced to 4.5 cents per litre, while prices averaging $80 to $84.99 per barrel trigger a 9-cent-per-litre tax.When oil prices drop below $80 per barrel, the full 13-cent fuel tax is reinstated.However, because the fuel tax is set to be adjusted quarterly — on January 1, April 1, July 1 and October 1 — relief does not occur immediately when there is a spike in prices.“Once we get over a certain threshold, because we’re getting more dollars in from royalties, we give everybody a break at the pump so that they don’t end up having it go up to $1.89 per litre, which is what it was at the peak before,” Smith stated.“The way that program works is that the elevated price above $80 has to be there for three months, and then we do the adjustment. So we’re coming to the end of this first quarter where we do that assessment.”According to the provincial government, the tax rate is determined using the average WTI price over the previous 20 trading days before each quarter begins.Smith said the government is watching developments in the Middle East closely and hopes the conflict will have a quick resolution.“I think we’re all hoping that the conflict resolves quickly, with minimal loss of life,” she said.“I know it’s not looking that way at the moment.”
