Alberta residents have not experienced significant drops in gasoline prices despite the suspension of the fuel tax on October 1. GasBuddy reported that in Calgary, prices fell by 10 cents to 150 cents per litre on the day the tax was suspended. However, by October 7, prices had risen to 171.5 cents per litre, marking a more than 20-cent increase within a week.
The surge in prices followed the province’s decision to halt the 13-cents-per-litre tax for the quarter, aiming to enhance gas affordability for consumers until the end of 2026. Premier Danielle Smith addressed concerns in Edmonton, highlighting that it might take time for pump prices to adjust. She advised consumers to utilize tools like the GasBuddy app to compare prices and emphasized the benefits of a free-market system.
Earlier this year, instead of lowering the fuel tax amid rising oil costs, the province provided a $100 affordability rebate to Albertans. However, facing criticism over the rebate, the government opted for a fuel tax cut. The provincial fuel tax rate is linked to the West Texas Intermediate (WTI) oil price, allowing for partial reductions based on specific WTI benchmarks.
The global surge in oil prices in 2026, driven by supply shortages due to conflicts in the Middle East and the Russia-Ukraine war, has hindered significant decreases in gas prices. Al Salazar, Enverus’ head of macro oil and gas research, stated that until fundamental issues like damaged Russian refineries and shipping disruptions in the Strait of Hormuz are resolved, consumer gas prices are unlikely to see substantial relief.
Salazar highlighted that discrepancies in gas station pricing are influenced by factors such as supply sources and constraints faced by all refiners globally. He suggested that significant price differences should normalize within a month or two.
Premier Smith acknowledged the sustained high gas prices due to ongoing Strait of Hormuz disruptions but emphasized Albertans’ relatively favorable situation compared to other provinces with significantly higher gas prices. She noted that Vancouver and St. John’s were experiencing much higher prices than Alberta. Service Alberta Minister Dale Nally echoed these sentiments, stating that Albertans continue to enjoy comparatively lower pump prices nationwide.
The government is closely monitoring pump prices and warns against price gouging. Businesses engaging in unfair practices could face fines of up to $300,000 or imprisonment. The province’s fuel tax suspension may be reinstated in the next quarter but with a capped increase of nine cents per quarter to mitigate sudden price shocks.