Higher Michigan gasoline prices could pump up Sarnia economy

The Blackburn News Sarnia vehicle at the pumps. February 14, 2019. (Photo by Colin Gowdy, BlackburnNews)

Potentially higher gasoline prices in Michigan could be good news for Sarnia-Lambton.

Governor Gretchen Whitmer is proposing a phased increase in the fuel tax totalling 45 cents a gallon, with the additional revenue being used to fix roads across the state.

GasBuddy.com analyst Dan McTeague said the move could lead to more Americans crossing the Blue Water Bridge for cheaper gas.

“With the US dollar being as strong as it is, and Canadian prices being somewhere in the vicinity right now of about $2.75 to $2.80 a gallon, you could see a circumstance for an American driver the incentive may very well be there to come over the border,” said McTeague. “And of course when they’re here they don’t just buy gasoline, they will buy other products too. So, I think there is a potential economic benefit and a reversal of a trend that none of us have seen, certainly in our lifetime.”

Should Whitmer’s budget proposal move forward, Michigan would have the highest fuel taxes in the United States.

The budget will require approval from the Republican-controlled legislature before it’s passed.

The first 15 cent increase would take place in October 2019, followed by increases next year in April and October.

McTeague said the increase in demand does have the potential to push prices higher here too, but that depends on the loonie and possible tax increases on this side of the border.

“There’s no doubt that in the short term, this could have a benefit and we would be able to supply that additional traffic given that it’s really only going to be coming over the bridge from Port Huron or across the Ambassador Bridge in the case of Windsor,” said McTeague. “Would it lead to higher prices, I think prolonged it would, but in the short term I think it will continue to be beneficial to Canadians and gas stations and of course other merchants.”

The total increase in the state fuel tax would see the average Michigan driver pay an extra $23 a month on gas.