The federal fuel tax break and its Maritime impact

Nova Scotia drivers could see another price increase at the pumps.

When gas receipts are printed out on Monday, there will be a line missing: the federal fuel excise tax.

“It’s going to be about a $4 to $8 savings for the average Canadian every fill up,” says Patrick De Haan, the head of petroleum analysis at GasBuddy.com. “Certainly, less pronounced for diesel.”

According to the federal government, the tax suspension – which lasts until Sept. 7 – is expected to reduce the cost of gas by 10 cents per litre on regular gas, and four cents on diesel.

But those savings could partially be cancelled out, as a $0.03/litre increase for the summer blend kicks in for the Maritimes on Thursday.

Still, the volatility of the market due to the war in Iran makes predicting prices challenging when threats of attacks or peace talks have implications.

The Retail Gasoline Dealers Association, representing more than 100 independent stations in Nova Scotia, says the tax break spells bad news for business.

“The retailers have already paid that tax for the fuel that’s in their tanks,” says Michelle Veinot, the association’s executive director.

“Now, they have to sell it to the consumer without that tax on it.”

But that’s not the association’s only concern. Last week, it submitted an emergency application to the Nova Scotia Energy Board, seeking, in part, an interim retail margin adjustment.

The organization wants a temporary increase on retail margins from five to 10 cents per litre.

“The cost of fuel is going up, their Visa fees go up and their wages go up, their power bill goes up, all of the cost of operating a business continue to increase,” says Veinot. “While that’s increasing, it’s taking up their margin. And there is no mechanism in place right now to increase that margin.”

The association is also calling for a wider review of the entire retail margin structure.

But these pressures, says Veinot, are leading some stations to consider closing their doors.

“Gas is a terrible business to be in right now,” Veinot says. “We are trying to help them so that it is a sustainable business. No business model should not be able to make a profit on its own.”

With a file from CTV News’ Stephanie Ha