Red Deer gas prices have fallen more than 50 cents since hitting their record peak in June.
The highest recorded average gas price in the city hit 210.8 on June 12. Gas at most stations on Thursday was 147.9 after falling steadily in the last few weeks. In the last week, prices are down 10 cents per litre and just under 40 cents a litre from July’s average price of 186.9, according to gasbuddy.com.
The sky-high prices prompted Premier Jason Kenney to demand an explanation and said he would ask the Competition Bureau of Canada to investigate potential gasoline price fixing in Alberta.
At the time, gas prices were close to $1.80 at many locations.
“It’s better than it was two weeks ago,” said Marcio Becegato as he filled up at a north Red Deer gas station on Thursday. “But it’s still too much.
“I know the government is trying to help us in a way, but I don’t think it’s enough. They can do more.”
Becegato, who lives in Red Deer and works in the scrap metal business, said fuel prices have driven up the cost of doing business. “I hire a lot of companies to transport material and they are charging us a lot.
“When you talk about transportation, the cost of transportation is too high right now and this is affecting everybody because (transport) companies need to charge someone. And in the end, it’s all of us (who pay).”
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Matt Saxton, of Blackfalds, works in the production side of the oil and gas business so he is directly affected by both sides of the oil price equation.
Like any driver, he welcomes spending less to gas up, but on the other hand, higher world oil prices are good for Alberta companies like his employer.
“I’m in the oil and gas industry so if it goes up I make more money too. It’s six or a half dozen to me honestly.”
Saxton has already seen the impact of higher world oil prices at work.
“I know we’re flat out. I can’t speak for the whole industry, but we’re busy and we’re always hiring.”
Generally, he does not pay too much attention to prices at the pump, he said, adding that whatever the price you have to gas up.
Analysts point to a number of factors for recent falling gas prices, which are happening in the U.S. and other countries as well. World oil prices have been falling on international markets, being driven by concerns that aggressive interest rate hikes designed to bring inflation under control will reduce spending and demand.
A strong U.S. dollar is also having an impact because it makes oil, which is mostly sold in U.S. dollars, more expensive on world markets.
In Alberta, the gas tax relief plan announced by the premier in the spring is tied to the price of the benchmark West Texas Intermediate (WTI).
The government stopped collecting the 13-cent provincial gasoline tax, a discount that is reviewed quarterly. If the WTI price falls below US$90 for an entire quarter, a portion of the gas tax will be reapplied. Tax relief is locked in until the end of September.
When WTI averages between US$85 and US$89.99, the fuel tax will be 4.5 cents per litre. At US$80 to US$84.99, the fuel tax would be set at nine cents per litre. Any price below US$80 USD would see the 13-cents-per-litre tax fully restored.
The WTI price has been falling but rebounded somewhat on Thursday, rising by more than US$2 to over US$94 in Thursday trading.