Ontario Gas Prices Rise Despite Carbon Tax Repeal

Highlights
- Ontario gas prices stay high, nearly erasing savings from the carbon tax removal.
- Ethanol blending, carbon offsets, and a weaker Canadian dollar are pushing prices upward.
- Experts advise filling up after 6 p.m. to save on gas station retail margins.
Relief at the pumps in Ontario has been short-lived, as gas prices have climbed again despite the recent removal of the consumer carbon tax.
A year ago, drivers were paying about 17.6 cents more per litre because of the tax. However, current prices are only about five cents lower than last year, suggesting that other market factors have cancelled out the savings.
One of the main pressures on prices comes from clean fuel regulations, which require more ethanol to be blended with gasoline.
Read More: Looking for a Carbon Fix? Canada’s Natural Solution Is Here
Ethanol, often made from corn or wheat in Canada, burns differently than gasoline, meaning cars may use slightly more fuel per trip. Refineries also rely on carbon offsets to meet emissions rules, which add around five to six cents per litre today and could rise to as much as 20 cents per litre by 2030.
Another factor is the weak Canadian dollar, which has slipped compared with the U.S. dollar. This adds about two cents per litre to costs.
On top of this, the wholesale price of gasoline in the U.S., which sets the benchmark for Canadian prices, is higher than last year. That increase adds another 11 cents per litre once taxes are factored in.
Combined, these elements increase costs by roughly 18 cents per litre, which effectively cancels out the savings that drivers expected from the carbon tax repeal.
Also Read: Canada’s Inflation Falls to 1.7% in April: Carbon Tax Removal Key Factor
Finally, gas stations add around seven to nine cents per litre to cover operational expenses. Analysts note that some stations reduce their retail margins in the evening, selling fuel closer to cost price. As a result, experts suggest drivers can often save a few cents by filling up after 6 p.m., particularly in larger cities.
Ends/
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Source: Global News














