Fuel tax pause set to lower costs at the pump

Alberta’s fuel tax is being put on pause. Beginning Oct. 1, the province will suspend its fuel tax through Dec. 31. That means a 13¢/L tax reduction on clear gasoline and diesel. For eligible producers buying marked farm fuel, which currently carries a 4¢/L provincial tax, the tax reduction is 4¢/L.

The provincial government announced the measure in response to rising energy prices and broader economic uncertainty. The tax suspension applies to both gasoline and diesel, reducing the cost of each litre sold at retail fuel stations across the province.

For producers and other rural businesses, fuel remains a significant operating expense, particularly during busy hauling and transportation periods. The reduction may help offset a portion of those costs through the end of the year.

Under Alberta’s fuel tax framework, gasoline and diesel tax rates are reviewed every three months and adjusted based on the average price of West Texas Intermediate (WTI) crude oil. For the quarter beginning October 1, the review period average was US $90.54 per barrel.

According to the province, Alberta’s average retail gasoline price was 175.5 cents per litre as of September 21. With the 13 cent per litre fuel tax removed, average prices would fall to approximately 162.5 cents per litre.

The government says it will monitor fuel prices to help ensure the tax reduction is reflected at the pump. Consumers who suspect unfair pricing practices can report concerns through Alberta’s Report a Rip-Off line.

Fuel tax rates will be reviewed again as of January 1, 2027, with the next review period running from November 17 to December 15, 2026.