Gas prices in Canada increase despite fuel tax pause as summer fuel blend drives prices higher

Gas prices in Canada are expected to rise again, despite a temporary federal fuel tax pause, as more expensive summer fuel blends arrive at pumps nationwide.

According to CTV News, the seasonal switch could add around 10 cents per litre to the cost of regular gasoline, largely offsetting the savings from the tax suspension.

“At this stage, it looks like we’re in for a very, very expensive summer,” said Dan McTeague, president of Canadians for Affordable Energy, in an interview with CTV.

The federal government recently announced a temporary suspension of the fuel excise tax from April 20 to September 7.

The move is expected to reduce prices by about 10 cents per litre for regular gas and four cents for diesel.

However, regulations require retailers to switch to summer fuel blends by mid-April. These blends remove butane, which is cheaper but contributes to pollution, making fuel more expensive to produce.

“Canadians are in desperate need of relief at the moment. But this is a drop in the bucket,” McTeague said in a recent news release.

He added that prices could climb further in the coming days. “We’re still waiting for the other shoe to drop,” he said, noting increases of up to five cents per litre may follow.

Rising global energy costs linked to tensions in the Strait of Hormuz are also expected to keep prices elevated through the summer months.