“It is our understanding that this increase has solely occurred in response to the natural disaster that has occurred in Louisiana and Mississippi,” says Minister Murphy.

The provincial legislation provides for provincial fuel taxes to be levied at the start of each month. Yesterday’s increase reflected the provincial fuel taxes for September and there will be no further provincial taxes levied on fuel prices until, potentially, the first of October.

Currently, the provincial tax on fuels is 21.3 cents per litre on gasoline and 20.1 cents per litre on diesel oil. Minister Murphy acknowledges the significant impact that today’s increase in petroleum prices will have on Prince Edward Island residents.

“We know people only have so much disposable income and understand this unforseen price increase may put a strain on many budgets,” says Minister Murphy. “Government will also see a corresponding effect on our operating costs. Every one cent increase in the price of fuel adds $150,000 to our operating costs.”

Prince Edward Island’s general economy may also be impacted as a result of people potentially having less disposable income.

“If the sales of goods and services are negatively impacted, the Provincial Treasury will also see a decrease in the amount of revenue brought in from our Revenue Tax (PST),” says Minister Murphy. “Government will need to tighten its belt, along with everyone else.”