Canada: Alberta to pause provincial fuel tax collection amid high prices of gas

"This massive tax relief is a response to skyrocketing costs at the pump and is going to provide Albertans with the relief that they need when the cost of everything is going up," Kenney told a news conference.

"Albertans told us they needed relief from rising costs. We've heard them loud and clear."

Kenney also said that the pause would remain effective as long as the benchmark price for West Texas Intermediate (WTI) crude oil remains above $90 US per barrel.

Resuming the collection of the provincial fuel tax would be only when WTI prices fall below $80 US, he said.

WTI closed at US$119 per barrel on Monday and by 9:30 a.m. MT on Tuesday, had ballooned to US$127 per barrel.

The pause in tax collection will apply to both gasoline, diesel fuel as well as to the four-cent per litre provincial fuel tax on marked (dyed) gasoline and diesel.

Previously Kenney had said the Alberta government would not offer relief to the Albertans at the pumps while the federal carbon tax hike was set to drive prices higher.

But on Monday Kenney said that he changed his mind because Albertans needed immediate relief from escalating fuel prices.

Finance MinisterTravis Toews reportedly said that the change to Alberta's fuel tax will put money back in Albertans' pockets at a time when other levels of government are seeking to take more out.

The government will also provide $150 electricity rebates to help more than Alberta families, farms, and small businesses with high electricity bills with a $50 monthly rebate for each of the months of January, February, and March. The retroactive rebates will be applied directly to energy bills, Kenney said.

The province said it will provide exact details, including rebate timing by working with utilities and regulators.

(Reporting by Asha Bajaj)