Record-busting gas prices set in N.L. with latest 5.5-cent hike

An increase in carbon taxes and a spike in fuel prices teamed upto push gasolineprices into record-setting territory across Newfoundland and Labrador on Thursday.

Prices jumped by 5 cents a litre across all of Newfoundland and in parts of Labrador, including western Labrador and Churchill Falls. In the rest of Labrador, gas went up 2.6 cents a litre.

A driving factor in the spike was an increase in the provincially collected carbon tax, which took effect early Thursday.

The carbon tax is applied to all fuels. For gasoline, the new increase goes from 6.63 cents a litre to 8.84 cents a litre, or an extra 2.21 cents a litre.

Overall, Thursday's price-setting from the Public Utilities Board means that consumers are now paying the highest ever for gas, not accounting for inflation.

A litre of self-service unleaded on the Avalon Peninsula where prices are cheapest can now sell for no more than $1.518. Many retailers in the area charge less.

Until now, the highest price for gas had been recorded in July 2008, when St. John's-area stations were selling self-serve unleaded gas for as much as $1.493 a litre.

Rising oil prices have helped drive up the cost of gas, but another factor affecting the market has been currency exchange. The Canadian dollar has been trading for considerably less against the U.S. dollar compared to the run of high gas prices in the late 2000s.

"There are other factors at play here, but that's the single biggest factor [is] how much we have to pay per U.S. dollar," St. John's financial adviser Larry Short told CBC News in a recent interview.

Meanwhile, the PUB also allowed retailers to increase the cost of diesel. Across Newfoundland and again in western Labrador and Churchill Falls, diesel is up by as much as 4.4 cents per litre. In other Labrador communities, diesel is up by 3.1 cents per litre.

Furnace oil is up 1.09 cents a litre.

The following chart shows how gas prices have changed recentlyat Newfoundland and Labrador retailers, as reported by users of the GasBuddy.com website.

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