Ontario drivers experienced some relief from record prices at the pump on Friday when the province’s gasoline tax cut went into effect.
The Ontario government reduced the gasoline tax by 5.7 cents per liter by the end of the year, although Prime Minister Doug Ford said he would consider an extension if inflation remains high.
Drivers noticed the impact Friday at gas stations in the Toronto area, where prices dropped by about 11 cents overnight to $ 1.93, only in part attributable to the tax cut.
“Every dollar counts,” Matthew Johnston said as he filled a cargo van at a gas station in downtown Toronto. “That will help a little bit.”
Gas prices in Toronto have risen nearly 40 percent since the beginning of the year, reaching an all-time high of $ 2.15 per liter in early June before the end of the month at around $ 2.00 per liter .
The cut also applies to diesel
Johnston, who runs a new restaurant company and works in a winery, says rising gas prices combined with inflation have forced him to cut spending.
“I couldn’t go out or do anything anymore. Honestly, everything went to gas, rent, you know, just the cost of living,” he said.
He usually puts $ 60 in the tank to make his almost daily commute to the Niagara area. On Friday, he opted to try a $ 40 fill.
The tax cut is expected to cost the province $ 645 million while it is in effect. Analysts note that Ford will face a difficult decision in December when the measure expires and that prices will rise again before Christmas.
Legislation passed this spring will also reduce the tax on fuels, which covers diesel, by 5.3 cents per liter until 31 December.
Hermain Kazmi said the tax cut was a move in the right direction as he pumped gasoline into his car. He said high petrol prices recently pushed him to use more public transport, but he hoped to return to his previous driving habits if prices fell.
Kazmi supported “100 percent” the government’s extension of the tax cut to 2023, even expressing hope that it could lead to more financial relief.
“I don’t think a 10-cent drop would have a big impact. It’s a good change, but I think it should go down based on how much inflation there is and how wages don’t adjust to how inflation has gone up.” , he said. .
Price linked to rising demand, invasion of Ukraine
Rising gas prices, a key driver of inflation, are tied to higher oil demand as the economy reopens following the COVID-19 pandemic. The situation has also been exacerbated by a global supply crisis caused in part by the Russian invasion of Ukraine.
Ali Avali stopped to fill his SUV on his way to a park outside Toronto, with his dog, an Alaskan Malamute, sitting in the back seat.
“The only reason I drive is because of this guy. I take him for a run around the country a little bit,” he said.
Once the loan to the SUV was paid off, Alavi said he plans to switch to an electric vehicle. He said he opposed a reduction in the gas tax, and suggested that if prices continue to rise, more people could also be inclined to make the change.
“When I see gasoline prices go up, it doesn’t really bother me,” he said.