Alberta lifts 13-cent fuel tax as Hormuz shock keeps Canadian pump prices elevated

Alberta removed its 13-cent-per-litre provincial tax on gasoline and diesel starting Thursday, offering drivers a temporary break after months of elevated pump prices tied to Middle East supply disruption and the effective closure of the Strait of Hormuz.

A Calgary Herald and Financial Post analysis published Oct. 1, using Kalibrate provincial price data, Statistics Canada mileage averages and fuel-economy figures for popular models, estimated that many Canadian drivers paid roughly 12 to 16 per cent more for regular gasoline in the first nine months of 2026 than in 2025. Ontario Ford F-150 drivers were near the top of that range — almost $300 more year over year in the newspapers’ illustrative math — with Alberta F-150 costs up about $237, or 13 per cent, before the tax lift. The federal government had already paused its 10-cent-per-litre federal fuel charge in April; Alberta also issued a one-time $100 rebate earlier this year. The province’s rules remove the fuel tax when North American oil stays above about US$90 a barrel for an extended period.

ATB Financial chief economist Mark Parsons told the Herald the cut provides “timely relief” but will not fully offset higher oil and diesel prices, warning households face stacked cost-of-living pressures. Kalibrate analyst Suzanne Gray said Midwestern U.S. refinery maintenance and tight gasoline supplies could still keep Western Canadian prices firmer than drivers want, even as seasonal winter-blend and lower autumn travel usually shave a few cents. Independent stations in southern Alberta expected a short-term jump in volume once the tax came off.

For Canadian consumers and markets watchers, the episode underscores how a distant chokepoint still shows up in weekly budgets — and how provincial tax toggles can blunt, but not erase, energy-driven inflation while Hormuz risk remains live.

This article is for information only and is not investment advice. It is not a recommendation to buy, sell or hold any security, commodity or currency.

Sources: Calgary Herald / Financial Post analysis.