The largest city in the Maritimes is ending the second week of a transit strike with no resolution in sight, and industry sources tell me it is too early to say whether Halifax gasoline retailers are pumping significantly more fuel as a result.
Officially, it may be too early to tell, but it isn’t a huge leap of faith to predict that the provincial government will experience a slight bump up in sales tax and motive-fuel-tax revenues over the next little while as more people are forced to use their vehicles to get around.
The hike in revenue is especially likely when one takes into consideration that Nova Scotia has some of Canada’s highest gasoline prices.
The weekly maximum price for regular self-service gasoline in New Brunswick was set at $1.328 a litre Thursday, although most gas retailers there sell gas for significantly less than the maximum. The Prince Edward Island price, set monthly, is in the mid-$1.20 range.
In Nova Scotia, the provincial Utility and Review Board sets the minimum price. The price was raised at midnight and it continues to edge closer to $1.40 a litre, higher than even Newfoundland and Labrador, the province that has traditionally held the highestprice- in-Canada label.
The Newfoundland and Labrador price is about $1.30 a litre.
Fuel taxes have the greatest effect on Nova Scotia’s gasoline prices.
The review board uses the cash price for gasoline in New York Harbor as the basis for setting its rate. It adjusts for the Canadian currency, now at par. It then adds the wholesale margin of six cents a litre, the federal excise tax of 10 cents a litre and the provincial motive fuel tax of 15.5 cents a litre.
According to the provincial formula, the regulator then adds a transportation allowance of 0.45 cents to 3.1 cents a litre, depending on the location of provincial gas stations. On top of that, the mandated retail margin is 5.1 cents a litre.
Then the provincial harmonized sales tax of 15 per cent is applied to the price, which basically adds a tax on top of a tax.
The people setting the price in Nova Scotia have no control over the world commodity price. The provincial price and the ones in most of Eastern Canada are based on the North Sea Brent crude price, around US$121a barrel, which is significantly more than the West Texas Intermediate crude price, now around US$102 a barrel and used to set the rate in most of Western Canada.
Europe’s sovereign debt crisis and Iran’s threats to block the Strait of Hormuz, an important waterway for bringing Middle East oil to market, put upward pressure on oil prices.
While we feel the effects of energy increase immediately at the gas pump and when we fill our oil tanks at home, the long-term effects of higher energy costs have the potential of driving a new round of inflation.
HEATING OIL PRICE SURVEY
The following is a survey of heating oil delivery companies in metro on Thursday. The price list is posted in cents per litre before taxes, discounts, coupons or special deals and is subject to change without notice.
Discount Fuels $98.5
The Oilman $98.5
AABEL Fuels $98.9
Save on Fuel $98.9
Affordable Fuels$ 99.8
At Home Heating Fuel $99.8
Budget Fuels $99.8
Cozy Fuels $99.8
Reliable Fuels $99.9
Esso $106.2
Ultramar $106.9
Bluewave Energy $107.9
Irving$ 107.9
Superline Fuels $107.9
Wilson Fuel $107.9
Scotia Fuels $111.9
