Gas-price drop ‘a very welcome development’

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This article was published 04/01/2024 (727 days ago), so information in it may no longer be current.

The temporary suspension of gasoline taxes by the NDP-led provincial government, lasting at least six months, has elicited mixed reactions from Brandon residents, as gas stations reduced pump prices by 14 cents.

This initiative, effective from Jan. 1, 2024, is anticipated to save an average Manitoba family with two cars approximately $250 during the six-month period.

Financial analyst Femi Afolabi told the Sun the initiative is an important step toward easing the economic burdens endured by Manitobans.

“This is a very welcome development as it is aimed at alleviating the pains shouldered by the residents of Manitoba, considering the relative rising costs of living in the province in recent times,” he said. “Reduced costs simply means there will be more savings, relatively lower prices of consumable items in the market, and by extension more investments for everyone.”

Considering the heightened economic metrics such as interest rates, taxes, and inflation since the onset of the COVID-19 pandemic, Afolabi said, the current tax freeze is a positive stride forward, noting it will not only provide relief to all but also enhance residents’ living standards.

Darlene Shoemaker also welcomed the decrease in gas prices.

“Any drop in price helps fill the tank,” she said, underscoring the immediate advantages consumers enjoy because of the price decrease.

While some consumers celebrated immediate cost savings, others like Akin Omole shared concerns regarding the fiscal repercussions and the mechanisms for tax reclamation in the fuel industry. Omole said he appreciates the immediate advantage of cheaper gas and recognizes its value to the public, but he questioned the potential long-term implications.

“I wonder whether the reduction in gas taxes might influence government funding allocation for essential services or community projects,” he said. “While citizens enjoy the benefits of lower gas prices, I hope this tax freeze won’t inadvertently impact crucial government initiatives or delay necessary services vital for the community’s well-being.”

Ryan Walker shared his concerns with the Sun via social media about the financial implications of the reduced gas tax.

“This is savings. But where is the money going to come from for the government now?” he inquired. “Not that I was happy paying $1.30, but it was what it was. Now that money is going to need to be collected somewhere else.”

Heritage Co-op general manager Dennis Laing shed light on the practical implications of the tax freeze within the gas industry.

Between the government’s announcement of the tax freeze and implementation date, he said, the company had concerns about whether it would be able to claim the 14 cents on inventory held in its tanks on Jan. 1.

“Through conversations with our members of the Legislative Assembly, we shared our concerns with government,” Laing said. “Through December, the government shared their plan and process to recover the 14 cents of tax on the inventory we held in our tanks on Jan. 1. At that time, the government also shared their plan and process to charge the tax on inventory we hold on the date the tax freeze is lifted.”

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