P.E.I. home heating fuel drops 19 cents more as IRAC adjusts for federal carbon tax break

Prince Edward Islanders who heat their homes with oil will pay 19 cents a litre less as of Friday afternoon, after the Island Regulatory and Appeals Commission applied the removal of the federal fuel charge to prices in the province.

That means retailers on the Island can charge a maximum of just under $1.42 per litre for home heating oil.

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The news came just after 4 p.m. AT, in a statement from IRAC.

"Just before noon today, the commission received formal notice from FinanceCanada that the draft regulations that enable the removal of the carbon tax on home heating oil for allAtlantic Canadians have been posted on the Finance Canada website and that Canada Revenue Agency willbe administering the measures on a provisional basis until the regulations are made," thestatement said.

"This allows the commission to remove the carbon tax portion on home heating fuel from its pricing model."

Prime Minister Justin Trudeau had announced on Oct. 26 that his government was granting a three-year exemption from the tax on home heating fuel for Atlantic Canadians,effective Nov. 9, 2023.

Early Friday morning, the weekly review of fuel prices by theIsland Regulatory and Appeals Commissionincluded a note that the commission did not yet have official word from Ottawa about the removal of the tax and so was continuing to include it in calculations for this week's prices.

That federal fuel chargewas added to heating oil on P.E.I. on July 1.

Prices down for all categories

The price for heating oil was down Friday morning even without the removal of the tax, as were prices for gas and diesel.

• The minimum price at the pump for gas was down 2.9 cents to $1.58/litre.
• The minimum price at the pump for diesel was down 5.7 cents to $2.02/litre.
• The maximum price for heating oil was down 2.1 cents to $1.60/litre, before falling to $1.42/litre.

After increasing rapidly through July prices for all three fuels levelled off my mid-August, and gas prices began to fall rapidly a month later. Prices for gas are down more than 30 cents.

It is not unusual for gas prices to drop in the fall, with demand down after the summer travel season.

What is uncommon is that heating oil prices are still falling at a time of year when demand is rising.

Even before the federal carbon tax portion was removed, prices were down about six cents since mid-September.

The next scheduled price review from IRAC is Nov. 17.