Alberta to Pause Fuel Tax Starting Oct. 1, Cutting 13 Cents per Litre at Pumps

The Alberta government will suspend the provincial fuel tax starting Oct. 1, citing high energy prices linked to global conflicts.

The government announced Sept. 22 that the move will cut 13 cents per litre from gasoline and diesel prices at the pumps. The pause will last until the end of the year to help ease financial pressures on residents.

“We have heard from Albertans who are facing continued high costs at the pump, so we’re taking action to help with the cost,” Premier Danielle Smith said in a news release. “It’s direct relief that will help Albertans keep more of their hard-earned money.”

The province said it will monitor pump prices to ensure gasoline companies pass on the fuel-tax savings and will take action against businesses “that price gouge at the pumps.” Businesses found guilty of such practices could face fines of up to $300,000 or two years in jail.

“Alberta’s government will continue monitoring oil prices throughout the next quarterly review period and, if average oil prices exceed the threshold, will determine the best options to ensure relief reaches Albertans,” the province said.

The pause follows Ottawa’s decision on Sept. 2 to extend its suspension of the federal excise tax on gasoline and diesel until Jan. 31, 2027. The federal suspension saves 10 cents per litre on gasoline and four cents per litre on diesel.

The federal government plans to reinstate the tax at half its regular rate on Feb. 1 and return it to the full rate on April 1.

The Alberta government reviews fuel tax rates for gasoline and diesel every three months, with the next review set for Oct. 1. The province bases the rates on the average West Texas Intermediate (WTI) oil price during the weeks leading up to each change.

For the quarter beginning Oct. 1, the review period ran from Aug. 18 to Sept. 15, when WTI averaged $90.54, the province said. The review period for the quarter beginning Jan. 1, 2027, will run from Nov. 17 to Dec. 15.

The government said it will not increase the fuel tax by more than nine cents per litre each quarter when oil prices fall, to limit the impact on Albertans. It also said Alberta families pay the lowest average fuel prices in Canada.

The province said retail gas prices in Alberta averaged 175.5 cents per litre as of Sept. 21. Removing the 13-cent tax that day would have reduced the price to 162.5 cents per litre, almost 20 cents below the next-lowest province.

Ontario ranked next at 181 cents per litre, while the national average stood at 189.8 cents per litre.

According to GasBuddy.com, Alberta’s average regular gas price was 173.1 cents per litre as of Sept. 25. Manitoba ranked next at 180.1 cents, while the national average was 213.8 cents.

Newfoundland and Labrador had the highest average at 224.1 cents per litre.