Higher oil refinery profits and an increase in the provincial carbon tax are both key to a 21-per-cent spike in the price of gasoline in Calgary compared to a year ago, an analyst says.
That jump is the biggest of any item included in the City of Calgary’s Inflation Review report for August, which compared price inflation since the same time last year.
The report, published Friday, shows headline inflation in Calgary rose to 2.26 per cent as of last month, compared with August 2017.
That was slightly lower than the provincial inflation figure but higher than the national rate of 2.15 per cent. Headline inflation is the rate measured using all components of the consumer basket of goods and services.
Food is about 1.5 per cent more expensive than it was about a year ago, while the cost of shelter rose about 1.7 per cent. But gasoline rose more than 21 per cent since last year, contributing to a nearly six-per-cent increase in the cost of transportation as a whole.
Dan McTeague, a senior petroleum analyst with GasBuddy.com, said inflation has hit Calgary’s gas prices harder than other cities across Canada. At about $1.336 per litre, he said gas prices in Calgary have risen 29 cents on average since last year, when they sat around $1.04 per litre.
“The increases have been noticeable and they’re certainly there,” said McTeague, who attributed an increase in refinery profits for nearly one-third of that spike.
“Refiners are picking up about nine cents a litre, net, more than they were at this time last year,” he said.
The price of oil is also a major factor, McTeague added, noting the cost of a barrel has risen from $49 to $70 since one year ago.
“Multiplied by the weakness in the Canadian dollar that’s probably accountable, you’re looking at an average of about another nine to 10 cents a litre,” McTeague said.
Other cities have also seen a rise in the price of gas since last year, including Edmonton, where gas is about 32 cents more expensive than it was at this time last year. Winnipeg, Regina and Saskatoon have all seen a roughly 24-cent jump, while the price has risen about 15 cents in Toronto, Montreal and Vancouver, according to McTeague.
He said an additional factor facing Albertans is the carbon tax increase that came into effect at the beginning of 2018.
The carbon levy increased to $30 per tonne of carbon dioxide emissions from $20 per tonne, the price implemented in 2017. That meant the tax on gasoline rose from 4.49 cents per litre to 6.73 cents per litre.
About 60 per cent of Albertans were to receive a full rebate to cover added expenses, such as a nearly 2.5-cent cost increase that was expected at the pumps.
McTeague said the move could be responsible for an additional 10 to 12 cents per litre in the cost of gas in Calgary.
“The carbon tax has a lot to do with the increase,” he said.
University of Calgary economist Trevor Tombe said Alberta’s inflation rate is in line with other provinces, as the Bank of Canada seeks to ensure inflation nationally remains between one and three per cent per year.
Other items that have seen a rise in cost since last year, according to the City of Calgary’s report, include water, fuel and electricity (5.61 per cent), health and personal care (2.33 per cent), and alcoholic beverages and tobacco products (3.13 per cent).