Red Deer motorists were in for a little sticker shock at the pumps on Wednesday. Gas prices jumped from 11 to 15 cents at most stations. (Photo by Paul Cowley/ Advocate staff)

Updated: Red Deer gas prices jump again

Prices at the pump soared 11 to 15 cents

Red Deer Gas prices smashed through the previous record high on Wednesday, jumping 11 to 15 cents per litre at most pumps.

The previous record high of 154.9 was set late last week and prompted Premier Jason Kenney to announce relief for drivers on Monday.

Kenney announced that if the price of the benchmark West Texas Intermediate stays above $90 US a barrel the province will stop collecting its 13 cents-per-litre gas tax. If oil drops below $80 US a barrel, the tax will be applied again.

The price cut will not kick in until April 1.

“This massive tax relief is a response to skyrocketing costs at the pump and is going to provide Albertans with the relief that they need when the cost of everything is going up,” said Kenney at the time.

The premier warned then that prices were likely to continue rising. Oil used in gasoline sold then was likely purchased weeks ago when prices were lower, meaning more price hikes are inevitable, he said.

While Alberta drivers might be grimacing at pump prices, the province has the lowest average prices in Canada at 168.4.

According to gasbuddy.com average gas price is a record 184.4 nation-wide. In B.C., Vancouver drivers paid an average 210.9 and Chilliwack drivers 229.9.

Trevor Gray was probably one of the few drivers in Red Deer on Wednesday who felt like he was getting a deal.

“I’m from B.C. so this is actually still cheap. It’s 199.9 at my house right now, so this is a bit of deal,” said Gray, who grew up in central Alberta but now lives in Campbell River, B.C.

“I appreciate the concerns that people have with the cost increases,” he said, adding that he feels for those with lower incomes who are already struggling.

For others who are better off, higher gas costs will likely be more of an inconvenience than make a big difference to their budgets, he suspects.

Among the positives, higher prices might help Canada’s efforts to reduce greenhouse gas emissions by convincing some people to cut back on unnecessary trips, take transit or look at other ways to use less gasoline.

For municipalities, which have large fleets of vehicles, the steep increase in fuel prices will have an impact on budget projections.

Red Deer County Mayor Jim Wood said staff will be monitoring the situation and will report back to council should any budget adjustments be required.

The county has a $700,000 contingency fund set aside to cover unexpected expenditures that could be tapped to cover higher fuel bills if necessary.

Contracts with grader operators have a built-in escalation clause to ensure higher fuel costs are manageable.

Paving projects, which are directly affected by oil prices, do not have those kinds of clauses. This year, the county’s practice of putting out tenders early in the year to get the best pricing had the added benefit of beating many of the steep oil price increases.

County councillors asked staff if paving contractors may request their contracts be changed if oil prices keep rising.

Marty Campbell, operations services director, said contractors have typically locked in their oil prices before making their bids. Contingencies ranging from five to 10 per cent, depending on the type of project, give them a buffer against unexpected cost increases.

If contractors seek more money because of rising costs it would have to come before council for approval.

Campbell said tendering early has paid off.

“If you were tendering a month from now, it probably wouldn’t be a good idea. You’d be paying through the roof.”



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