Ontario drivers woke up to another noticeable increase at the pumps today. GasBuddy’s provincial price page showed regular gasoline averaging approximately 176.7 cents per litre, an increase of about 4.9 cents per litre from the previous day. Prices vary by community, station and time of day, so some drivers will pay more or less than the provincial average. Personally I paid 152.6 per litre on Sunday to fill my truck and on my way to work today it was 182.9 which was a 30.3 cent per litre jump.
For a typical 50-litre fill-up, a 4.9-cent increase adds about $2.45. At 176.7 cents per litre, that fill-up costs approximately $88.35.
The important point is that no new Ontario gasoline tax took effect today. The increase is primarily a market-price movement occurring alongside higher global crude-oil prices and renewed concern about Middle East supply. Retail gasoline prices do not always move in perfect lockstep with crude oil on the same day, but crude costs, wholesale gasoline markets, refinery conditions, the Canada–U.S. exchange rate and local competition all feed into the price displayed at the pump.
The short answer: why did gasoline rise today?
Oil prices moved sharply higher on September 1 as renewed U.S.–Iran tensions increased concern about global supply. Reuters reported West Texas Intermediate crude near US$88 per barrel and Brent crude near US$93 during the day. Canada produces a great deal of oil, but Canadian gasoline is still priced within an interconnected North American and global market. When the value of crude oil and wholesale gasoline rises, Canadian fuel distributors and retailers generally pay more to replace the gasoline they sell.
Several forces can therefore contribute to a one-day pump-price increase:
- a higher international crude-oil price;
- a higher wholesale or “rack” price for finished gasoline;
- refinery outages, maintenance or reduced capacity;
- concern about disruption to major shipping routes or oil-producing regions;
- changes in the Canadian dollar against the U.S. dollar, because oil is normally priced in U.S. currency;
- regional transportation, storage and distribution costs; and
- changes in local retail competition and station margins.
Today’s increase should not be described as a new carbon-tax increase. The federal consumer carbon charge was cancelled effective April 1, 2025. In addition, the federal government temporarily suspended the normal 10-cent-per-litre federal gasoline excise tax from April 20 through September 7, 2026.
Where does the money from one litre of gasoline go?
Using today’s approximate Ontario average of 176.7 cents per litre, the following calculation shows the portions that can be identified directly from current tax rules.
| Component | Approximate amount per litre | What it pays for |
|---|---|---|
| Ontario gasoline tax | 9.0¢ | Provincial tax charged as a fixed amount per litre |
| Federal gasoline excise tax | 0.0¢ temporarily | Normally 10.0¢/L, but suspended through September 7, 2026 |
| Federal consumer carbon charge | 0.0¢ | Cancelled effective April 1, 2025 |
| HST included in the posted price | 20.3¢ | Ontario’s 13% HST; the embedded amount is 176.7 × 13 ÷ 113 |
| Market portion before HST and fixed fuel taxes | 147.4¢ | Crude oil, refining, wholesale marketing, transportation, distribution and the retail station’s gross margin |
| Total pump price | 176.7¢ | Approximate Ontario average on September 1, 2026 |
At today’s price, governments receive approximately 29.3 cents per litre in directly identifiable Ontario gasoline tax and HST. That is about 16.6% of the pump price. The remaining 147.4 cents, or about 83.4%, is the combined market portion.
This is a snapshot under the temporary federal excise-tax suspension. If the normal 10-cent federal excise tax returns after September 7 and all other pre-tax components remain unchanged, HST would also apply to that additional amount. The theoretical pump-price effect would therefore be approximately 11.3 cents per litre, although actual market prices may move up or down at the same time.
A 50-litre fill-up: who receives what?
At 176.7 cents per litre, a 50-litre purchase totals approximately $88.35.
| Destination or component | Approximate amount on 50 litres |
|---|---|
| Ontario gasoline tax | $4.50 |
| Federal gasoline excise tax | $0.00 temporarily |
| Federal consumer carbon charge | $0.00 |
| HST included in the total | $10.17 |
| Combined market portion | $73.68 |
| Total paid | $88.35 |
The $73.68 market portion is not the gas station’s profit. It must cover the physical product and the entire supply chain before any net profit is earned.
What is inside the market portion?
The market portion can be divided conceptually into four stages, but its precise real-time division is not visible from the pump price alone.
1. Crude oil
Crude oil is the principal raw material used to make gasoline and is generally the largest underlying market cost. Its price is influenced by global production, demand, inventories, war and political risk, shipping disruptions and decisions by major oil-producing countries.
Canadian production does not insulate Ontario drivers from world prices. Producers sell into competitive markets, refineries purchase particular grades of crude, and the relevant prices are commonly quoted in U.S. dollars. A weaker Canadian dollar can therefore make crude and refined products more expensive in Canadian currency even if the U.S.-dollar oil price is unchanged.
2. Refining and wholesale gasoline
Crude oil cannot be poured directly into a vehicle. A refinery must turn it into gasoline that meets seasonal, environmental and octane specifications. Refining costs include energy, labour, maintenance, capital equipment and regulatory compliance.
The value of finished gasoline can rise faster than crude when refinery capacity is tight or an outage reduces supply. This is why dividing the retail price by the price of a barrel of oil does not produce an accurate profit calculation.
3. Transportation, terminals and distribution
Gasoline moves through pipelines, marine terminals, rail systems, storage terminals and tanker trucks before reaching a service station. Distance from supply, available storage, regional inventories and transportation constraints help explain why prices differ among Ontario communities.
4. The station’s gross retail margin
The amount left between a station’s fuel acquisition cost and its selling price is a gross margin, not pure profit. It must help pay credit-card fees, wages, electricity, property costs, insurance, equipment maintenance, environmental compliance and other operating expenses. Competition can push this margin down, while limited local competition can allow it to widen.
Because wholesale contracts and station acquisition costs differ, no responsible province-wide calculation can state that a fixed number of cents from every litre is oil-company or retailer profit on a particular day.
Is HST charged on top of gasoline taxes?
Yes. Ontario’s posted pump price already includes HST, and HST is calculated on the selling price after the fixed per-litre fuel taxes have been included. That is why people often describe part of the bill as a “tax on tax.”
At a posted price of 176.7 cents per litre, the HST portion is not 23.0 cents. Because the tax is already included in the displayed price, it must be backed out using this calculation:
176.7 × 13 ÷ 113 = approximately 20.3 cents per litre.
Simply multiplying the posted price by 13% would overstate the HST embedded in that price.
What happened to the carbon tax on gasoline?
The federal consumer fuel charge was cancelled on April 1, 2025. Ontario motorists therefore do not currently pay a separate federal consumer carbon charge on each litre of gasoline.
Canada still has industrial carbon-pricing rules and federal Clean Fuel Regulations. Those policies can affect costs elsewhere in the supply chain, but they are not the former consumer carbon charge and should not be presented as a current fixed carbon-tax amount on an Ontario pump receipt.
Why can prices change before a station receives a new delivery?
Gas stations generally set prices with reference to the cost of replacing their inventory, competitive conditions and supplier pricing—not only what the fuel currently underground cost when it was delivered. If wholesale replacement costs rise, a retailer may raise its posted price before the next tanker arrives. The reverse can also occur when replacement costs fall.
This practice can frustrate drivers, but it is common in markets where the selling price must finance replacement inventory whose cost changes daily.
How much does today’s increase cost a household?
A 4.9-cent-per-litre increase produces the following additional direct cost:
| Gasoline purchased | Added cost from a 4.9¢/L increase |
|---|---|
| 40 litres | $1.96 |
| 50 litres | $2.45 |
| 70 litres | $3.43 |
| 100 litres | $4.90 |
| 200 litres per month | $9.80 per month |
The larger economic effect extends beyond personal vehicles. Higher gasoline and diesel costs can eventually affect contractors, farms, delivery companies, municipal fleets and businesses. The degree to which those costs reach consumers depends on fuel contracts, competition and how long the increase lasts.
Will prices continue to rise?
No one can reliably guarantee the next daily move. Prices could rise further if oil supplies are disrupted, wholesale gasoline strengthens or the Canadian dollar weakens. They could fall if tensions ease, oil retreats, refinery supply improves or local competition increases.
There is also a known policy date approaching. The federal excise-tax suspension is scheduled to end after September 7, 2026. Unless Ottawa extends the measure, the normal 10-cent-per-litre gasoline excise tax is expected to return. With Ontario HST, the isolated mathematical effect is approximately 11.3 cents per litre—but the number on station signs will also reflect whatever happens in oil and wholesale markets at that time.
The bottom line
Ontario’s gasoline increase today is mainly a market-driven jump occurring during another rise in world oil prices and supply concerns. It is not the result of a new tax introduced today.
At an average pump price of 176.7 cents per litre, approximately 29.3 cents is identifiable Ontario gasoline tax and HST, while roughly 147.4 cents covers the gasoline itself and the chain that refines, transports, distributes and sells it. The normal federal excise tax is temporarily absent, and the former federal consumer carbon charge is no longer applied.
Understanding those distinctions matters. Governments collect a significant amount at the pump, but neither every price increase nor the entire market portion can honestly be labelled a tax, a retailer’s profit or an oil company’s profit. A credible breakdown must separate known taxes from the market costs that change from day to day.
Verified sources
- GasBuddy — Canada average regular gasoline prices by province
- Reuters — Oil prices and global markets, September 1, 2026
- Prime Minister of Canada — Temporary federal fuel excise-tax suspension
- Government of Ontario — Gasoline tax rates
- Natural Resources Canada — Why gasoline prices go up and down
- Natural Resources Canada — Why gasoline prices vary across Canada
- Statistics Canada — Monthly average retail prices for gasoline and fuel oil
- CAA — Gas prices and the factors affecting them
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