Alberta residents have not experienced significant drops in gasoline prices since the province halted its fuel tax on October 1. According to GasBuddy, prices in Calgary decreased by 10 cents to 150 cents per liter on the day the fuel tax was suspended. However, by October 7, prices had risen back up to 171.5 cents per liter, representing a more than 20-cent increase within a week.
The surge in prices followed the province’s decision to suspend its 13-cents-per-liter tax for the current quarter until the end of 2026 in an attempt to make gasoline more affordable for consumers. Premier Danielle Smith, speaking in Edmonton, noted that it might take time for pump prices to adjust and advised consumers to seek out cheaper options using tools like the GasBuddy app.
Earlier this summer, instead of cutting the fuel tax amidst rising oil prices, the province provided a $100 affordability rebate to Albertans. However, facing criticism over the rebate, the government opted to implement a fuel tax reduction. The provincial fuel tax rate is linked to the West Texas Intermediate (WTI) oil price, allowing for partial reductions based on specific WTI averages.
Oil prices have surged due to tight supply resulting from conflicts in the Middle East and the Russia-Ukraine war. Al Salazar, Enverus’ head of macro oil and gas research, emphasized that significant decreases in gas prices for consumers are unlikely until the root causes, such as damaged oil refineries in Russia and shipping disruptions in the Strait of Hormuz, are resolved.
Salazar highlighted that global constraints impact local gas stations’ price differentials, and these disparities are expected to normalize within a month or two. He described the current measures as temporary solutions until the underlying issues are addressed.
Despite acknowledging the likelihood of sustained high gas prices due to ongoing disruptions in the Strait of Hormuz, Premier Smith asserted that Albertans are in a better position compared to residents of other provinces with considerably higher gas prices. Service Alberta Minister Dale Nally echoed this sentiment, stating that Albertans are still benefiting from relatively low pump prices in Canada.
The government vowed to monitor pump prices following the fuel tax cut announcement, warning that businesses engaging in price gouging could face fines up to $300,000 or imprisonment for up to two years. Nally encouraged individuals to report any suspicions of unfair practices at gas stations to the consumer investigations unit.
The province’s fuel tax may be reintroduced partially in the next quarter starting in January 2027, with tax increases limited to a maximum of nine cents per quarter to mitigate abrupt price hikes for consumers.
