Apart from commercial trucks, and heavy-duty vehicles, some standard passenger cars also use diesel fuel. It provides higher fuel efficiency and torque. If you use diesel fuel for your car or truck, know the price range and other factors that influence it. It’s a good idea to keep tabs on the price.
This article will discuss the price range of diesel fuel in Canada to help you make better decisions that can help save costs.
Prices Of Diesel Fuel In Canada
Diesel price in Canada is never fixed as several factors influence it. As of May this year, the average starting price of diesel fuel in Canada is about CA$1.50 per liter. This price can vary depending on the province, demand, taxes, local supply, and global crude oil prices.
It’s worth stating that diesel fuel prices are always higher in larger provinces or cities due to higher living costs and demand. This price estimate should be your guide as you’re planning to buy but don’t solely rely on it because it can vary.
Diesel Fuel Price In Canada: What You Need To Know
Most of the diesel fuel in circulation in Canada is produced by the Western Canadian Sedimentary Basin( WCSB). It holds the third largest reserves of petroleum and natural resources globally, and it supplies North American countries. While Canada has several refineries producing millions of barrels of oil daily, it still imports from supplies abroad.
Along with global factors, fuel price is also affected by several provincial and federally imposed taxes. Except in cases of urgency, the Canadian government does not control costs. As of August 2022, the federal carbon tax raises the price of each liter of gasoline by 11 cents. The province with the highest tax burden in Canada is Vancouver, where taxes account for 38% of the entire cost.
Factors That Influence Fuel Price In Canada
As discussed earlier, major influencing factors interfere with the price of diesel fuel in Canada. Let’s explicitly uncover these factors as follows:
Global Crude Oil Prices
Global crude oil price is one of the significant factors that determine the price of diesel fuel. We get diesel fuel from crude oil and the cost of crude oil accounts for a large part of diesel fuel prices.
Hence, fluctuations in crude oil prices will directly impact diesel prices. For instance, when the cost of global crude oil increases, the price of diesel fuel increases and vice versa.
Supply and Demand
This factor is self-explanatory—the rule of economics: when demand for a good and service increases, cost also increases. In areas where there is a high demand for diesel fuel, prices are likely to be higher than in areas where there is a lesser demand.
Similarly, if there is a shortage of diesel fuel in a particular area, that area’s diesel fuel price may increase due to transportation expenses and other reasons.
Transportation
Another element that may impact Canadian diesel fuel prices is transportation expenses. Trucks, railroads, or pipes are commonly used to transfer diesel fuel from refineries to distribution centers, which are then used to deliver it to gas stations.
Depending on the distance, the mode of transportation, and other elements, the cost of transportation can change. These expenses may be passed on to customers, raising diesel prices in some areas.
Taxes
In Canada, taxes significantly impact how much diesel fuel costs. Diesel fuel is subject to excise taxes, sales taxes, and carbon taxes levied by the federal and provincial governments. Depending on the province, these levies might differ greatly and contribute significantly to the cost of diesel fuel.
Key Points to Note
- Diesel is more expensive than gas in Canada
- Many factors affect the diesel price. Some include supply and demand, fluctuations in global crude oil prices, taxes, and local supplies.
- Regional factors such as provinces, geopolitical events, natural disasters, and weather conditions also influence the price.
- Quality may vary between regions and gas stations
- Depending on the provinces, carbon pricing systems may be implemented to charge fees on carbon emissions from diesel fuel.
- Biodiesel is an excellent alternative to diesel fuel for vehicles as it may provide some costs and environmental benefits. It is derived from renewable sources such as animal fats and vegetable oil.
- Always choose a reputable gas station to ensure you’re buying a high-quality diesel product.
- Lastly, always keep a tab on the price of diesel fuel, as it’s very volatile.
Final Thoughts
You can manage your fuel expenses and decide when and where to purchase diesel fuel by being aware of these aspects. It’s crucial to stay current on diesel pricing if your company depends on diesel fuel for operations. It would be best to look at measures to cut fuel expenditures, such as fuel-efficient driving habits, route optimization, and alternative fuels.
