Many drivers in Ontario were happy when consumer carbon pricing was removed earlier this year. It was expected that gas prices would drop and give people relief at the pump. But now, it looks like that relief didn’t last long. Gas prices this week are only about five cents lower than they were a year ago — almost no difference.
Last year, drivers in Ontario had to pay an extra 17.6 cents per litre because of carbon pricing. This system was meant to encourage people to use less fuel and reduce pollution by making gasoline more expensive. The extra cost helped fund programs to cut carbon emissions.
The Canadian Taxpayers Federation pointed out that removing carbon pricing should have saved drivers a lot of money at the pump. But the prices are not reflecting that.
Dan McTeague, president of Canadians for Affordable Energy, explained why gas prices remain high despite removing carbon pricing. He said there are several reasons:
Gasoline blends used in the summer are more expensive to produce. An industry expert expects prices to drop by seven or eight cents per litre around September 15 when summer gasoline is replaced by cheaper blends.
Gasoline today contains more ethanol, a type of alcohol made from plants like corn and wheat. Ethanol is better for the environment because it produces fewer carbon emissions than regular gasoline. But ethanol doesn’t burn as efficiently.
For example, a car that used to travel 100 kilometres using 8 litres of gasoline now needs about 8.2 or 8.3 litres to go the same distance. So, even though ethanol is “cleaner,” it increases the amount of fuel used and adds to the overall cost.
To meet environmental rules, fuel companies also buy something called carbon offsets. These are payments to other projects that reduce carbon, like planting trees. Buying offsets adds about five or six cents per litre to the price of gas today. Experts warn this could rise to 20 cents per litre by 2030.
The Canadian dollar is weaker compared to the U.S. dollar than it was last year. Since gasoline is often priced based on U.S. markets, a weaker Canadian dollar adds about two cents per litre to the price in Canada.
Gasoline prices in the United States are up by almost 30 cents per gallon compared to last year. When converted, this adds around 11 cents per litre to the cost of gasoline in Canada.
So, even if carbon pricing is removed and cuts 17.6 cents per litre, other costs are filling the gap:
5 to 6 cents per litre for carbon offsets
2 cents per litre from the weaker Canadian dollar
11 cents per litre from higher gasoline prices in the U.S.
These add up to about 18 cents per litre — enough to erase the savings from removing carbon pricing.
Gas stations themselves add about seven to nine cents per litre on top of wholesale prices and taxes. This extra charge covers their operating expenses, like keeping the station open, paying staff, and managing storage.
McTeague explained that some gas stations reduce their profit margins, especially in the evenings. They may sell gasoline close to the price they pay for it just to attract customers.
McTeague gave advice to drivers: Never buy gasoline before 6 p.m. He said that gas stations often charge more during the day and lower prices in the evening. By waiting, you could save seven to nine cents per litre, which adds up if you fill up often.
Even though carbon pricing was removed, other factors have kept gas prices high. Clean fuel rules, carbon offsets, a weak Canadian dollar, and higher wholesale prices are making it difficult for drivers to feel the benefit of this change. Gas stations also add their own costs, making fuel even more expensive.
Experts advise that consumers pay attention to the timing of purchases and ask questions about the fuel they are buying. Watching fuel prices and understanding how they are set can help drivers make better choices and save money where possible.
For now, drivers in Ontario and other parts of Canada are facing higher prices at the pump despite government changes aimed at reducing their burden. It shows how global factors, environmental rules, and currency changes can affect everyday costs in surprising ways.
Shinsegae chairman issues apology as Starbucks Korea faces backlash for ad linked to Gwangju massacr
Israeli minister Itamar Ben-Gvir faced global criticism after videos showed detained Gaza flotilla a
Foreign ministers from Quad nations convened in New Delhi to enhance cooperation on security and eco
North Korea fires ballistic missiles and other weapons, heightening regional military tensions amid
