Prime Minister Stephen Harper says Canadians will have to live with higher gas prices, adding his promised GST cut will be all the tax relief motorists get.

"In our last election, our commitment was to lower the GST on all products and all services," he told reporters Wednesday in Winnipeg. "That's what we intend to do."

The Conservatives promised in 2004 to limit the GST collected on gasoline once prices exceeded 85 cents per litre. So even if prices hit a dollar or more, the federal government would only collect GST on the first 85 cents.

Harper said that was two elections ago, adding that promise has been supplanted by the general one-point GST cut expected in the Tories' first budget.

The federal budget will be unveiled either later this month or in early May.

Harper conceded his GST cut would only make a marginal difference to Canadian motorists.

Higher gas prices appeared to be a reality in the immediate future, he said. "That's going to be something that we're going to have to get used to.

"Worldwide, long run, the demand for energy products is outstripping the supply, and I think we're going to see sustained upward pressure on prices for some time to come.

"This is something we're all going to have to adapt to and it's one of the reasons why when we deal with climate change and other issues, we're going to want to encourage the development of alternative energy sources."

Six months ago, Harper attacked the government over high gas prices.

"Rather than continue to rake in record high revenues from record high oil prices, will the government simply cut gas taxes for consumers?" he asked in question period.

A Liberal MP said Harper should practice what he preached back then.

"He has to be accountable for this. It's not a question of pick and choose. He made it very clear where he would stand on this," said Ontario MP Dan McTeague.

MacKay's hints

Earlier Wednesday, Foreign Affairs Minister Peter MacKay hinted that Canadian drivers may get a break from soaring gasoline prices when the Conservative government unveils its first budget.

"There are discussions about that right now and we have a budget coming and we're getting all kinds of submissions ... on what to cut and what not to cut," MacKay told reporters after attending the Halifax Chamber of Commerce annual general meeting.

MacKay, the member of Parliament for Central Nova, said the federal cabinet will discuss fuel prices next week.

Meanwhile, the average cost of a litre of regular gasoline jumped to almost $1.08 this week.

The highest price recorded Tuesday was in Labrador City, N.L., where gas was on sale at $1.24 a litre. The lowest price was in Lethbridge, Alta., where it was 93.4 cents a litre.

Analysts predict more price increases as the demands of the summer vacation driving season approaches.

On Wednesday, oil prices hit $72 per barrel -- the third straight day they hit a new record.

All futures contracts for oil on the New York Merchantile Exchange are above $70 per barrel until July 2009.

"In effect, the market is saying this is going to be with us for a while," A.G. Edwards & Sons commodity analyst Bill O'Grady told The Associated Press.

Some analysts say $80 per barrel oil is possible this summer. June contracts purchased Wednesday had oil priced at $74 US per barrel.

However, the TD Bank said crude oil prices could be set to tumble, as speculators are driving the price up. The bank said it thinks crude oil prices will drop by as much as 20 per cent by this fall.

With a report from CTV's David Akin