Gas prices headed for 5-cent rise despite relief from Ontario fuel tax

By Lucas Casaletto

Ontario gas prices are again headed for an increase, days after the government cut the gas tax by 5.7 cents per litre until the end of the year.

Roger McKnight, Chief Petroleum Analyst at En-Pro, expects fuel price to rise five cents on Wednesday to an average of 191.9 cents per litre at most GTA stations.

“I believe I warned everyone about this on July 2. [It] just took them a while to trigger the increase,” McKnight said on Tuesday.

On Saturday, McKnight noted that while wholesale prices in Canada did not change due to the July 1 holiday, it changed in the U.S. and would trickle down to Canada this week, leading to a rise in gas prices.

Drivers experienced temporary relief from record-setting prices at the pump on Canada Day, dipping the cost of gas to 186.9 cents per litre at GTA stations after an 11-cent drop on Friday.

Premier Doug Ford has said he would consider an extension of the gas tax cut if inflation remains high.

gas prices

Ontario gas prices page for July, courtesy of En-Pro International.


McKnight said the Canada Day drop was a direct result of the Ontario gas tax cut and a decline in wholesale prices, which can be attributed to an increase in U.S. inventory and a slowdown in demand for gas, diesel and jet fuel south of the border.


RELATED: How Canadians, including non-drivers, are paying more due to soaring gas prices


The tax cut is expected to cost the province $645 million while it’s in effect. Analysts note Ford may face a tough decision in December when the measure expires, with prices likely to rise before Christmas.

The legislation passed this spring will also cut fuel tax, which covers diesel, by 5.3 cents per litre until December 31.

The soaring price of gas, a key driver of inflation, is tied to an increased demand for oil as the economy reopens after the COVID-19 pandemic.

The situation has also been exacerbated by a global supply crunch caused partly by Russia’s invasion of Ukraine.


Visit CityNews daily for updates on gas prices across the GTA

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