Alberta considers shift in fuel tax exemption policy

The Government of Alberta is consulting with fuel sellers and purchases on a proposal to shift the provincial fuel tax exemption from marked fuel to clear fuel. The consultation period runs from August 1-31, 2025, and stakeholders can submit their feedback through an online survey.

Marked fuel — diesel or gasoline dyed to distinguish it from clear fuel — is currently sold at a reduced tax rate of four cents per litre to eligible users. This includes individuals and organizations in agriculture, oil and gas, and forestry, where the fuel is used in off-road or unlicensed equipment.

The proposed change would not alter the exemption rate but could simplify the system by applying the exemption to clear fuel instead. Some retailers have suggested that this approach may reduce administrative costs and improve efficiency for both sellers and consumers.

Government officials have stated that the consultation aims to gather input from industry stakeholders before making any decisions. Recommendations based on the feedback will be presented to the government in the fall.

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