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Government making windfall profits while gas prices skyrocket Reid says now is the time to give consumers a break June 29, 2005
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Opposition Leader Gerry Reid says increased oil royalties and tax revenues
are helping to boost the province’s coffers, while consumers in this
province continue to struggle to afford enough gas to keep their vehicles on
the road. Reid says now is the time for government to reduce or cap the
amount of provincial tax it collects when oil prices are high. Media reports this morning indicate that the provincial government is making an extra $400 million in profits this year from increased offshore oil royalties. In addition, the province is collecting more money through gasoline taxes. Currently, over 39 cents of the cost per litre of gasoline is direct tax. Of this amount, the province collects a direct gasoline tax of 16.5 cents per litre and a portion of the 15 per cent HST that is applied to pump prices. "The price of gasoline in all regions of this province now costs over a dollar a litre," said Mr. Reid. "This will be one of the most expensive summers on record for consumers in this province. Each time someone fills up their vehicle, it will cost them extra money. While the price of gasoline is extremely high right now, analysts predict it could go even higher over the next few months. "Now is the time for the provincial government to take action. Not only are they making record profits because of the increased price of oil, they are also receiving more revenues through gasoline taxes at the pumps. These profits are coming directly from the pockets of ordinary Newfoundlanders and Labradorians, many of whom are struggling to find enough money to fill up their tanks. "I am calling on the Premier and Minister of Finance to address this situation. The taxes that are currently applied to a litre of gasoline should be reduced or a cap on taxes should be considered once the price per litre reaches a certain point. The people of the province are suffering through these current energy prices, while government is making record profits. It is now time for the province to give some of these benefits back to the people, an initiative that will not hurt the bottom line. "I raised the issue of an electricity rebate a couple of weeks ago. I am now calling on an initiative to deal with the price of gasoline. With this growing list of energy issues, government must bring forth their much promised energy policy and the direction the province plans to take to deal with these issues. We have delayed long enough, now is the time for action."
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