Gas Prices Are Finally Falling in Canada — Here's How Much You're Saving and What Comes Next
After weeks of painful price spikes driven by the U.S.-Iran conflict, Canadians are finally catching a break at the pump. The national average gas price dropped to 169.1 cents per litre on Monday, April 20 — down from a peak near 198 cents — as two things happened at once: Iran reopened the Strait of Hormuz to commercial traffic, and Prime Minister Mark Carney's federal fuel excise tax suspension came into effect.
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National Average
169.1¢/L
▼ Down from ~198¢/L peak
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Gas savings (excise tax)
10¢/L
off gasoline until Sept. 7
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Diesel savings
4¢/L
off diesel until Sept. 7
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WTI Crude (current)
~$87
▼ Down from $120 peak
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What just happened — and why
Since the U.S.-Iran conflict began in late February, Brent crude surged more than 55%, briefly topping $120 a barrel — the largest oil supply shock in the history of global markets, according to the International Energy Agency. Canada's pump prices rose roughly 30% from March to April, with gasoline posting a record 21.2% single-month jump in March alone.
Two developments have since brought prices down. First, Iran declared the Strait of Hormuz reopened to commercial traffic on April 17, sending crude prices falling more than 10% in a single day. Second, PM Carney announced — and enacted on April 20 — a temporary suspension of the 10 cents per litre federal excise tax on gasoline and 4 cents per litre on diesel, running through to Labour Day, September 7, 2026. The total cost to the federal government: an estimated $2.4 billion.
Important caveat: The Strait of Hormuz situation remains unstable. The U.S. Navy seized an Iranian cargo ship on April 19, and Iran temporarily re-imposed tighter controls over the weekend. A second round of U.S.-Iran talks is now underway in Islamabad. Oil experts warn that lasting price relief will depend on a durable diplomatic resolution — not just a temporary ceasefire.
How much are Canadians actually saving?
The 10 cents per litre saving is real and immediate — confirmed in Newfoundland and Labrador, where gas dropped 11.5 cents per litre on Monday as the excise suspension took effect. For a typical driver filling a 60-litre tank, that's about $6 saved per fill-up, or roughly $30–$50 per month depending on driving habits.
Truckers and businesses that run diesel fleets will see smaller but still meaningful savings of 4 cents per litre — important for food, construction, and delivery sectors where fuel is a major operating cost, and where those savings can help keep prices from rising further for consumers.
Note: Gas stations are not legally required to pass the full 10¢ savings on to consumers. Experts advise Canadians to shop around and use price-tracking tools like GasBuddy or the new Quebec real-time gas map to find the best prices in their area.
What about Quebec and Alberta?
Quebec drivers are benefiting from the federal excise suspension, but still face the highest pump prices in Canada — largely because of a provincial fuel tax of about 19.2 cents per litre and a cap-and-trade system that adds roughly 8 cents per litre. Quebec Premier Christine Fréchette has said "nothing is off the table" regarding provincial relief, but no announcement has been made yet.
Alberta, meanwhile, is holding its provincial fuel tax in place at least until July. Finance Minister Nate Horner said the province supports Ottawa's move but cited oil price volatility and budget pressures — Alberta's deficit projections are closely tied to WTI prices — as reasons to wait.
What happens after Labour Day?
The federal excise tax is set to return to its full rate on September 8, 2026, meaning the 10¢/L break is temporary. Whether Canadians will still feel the pinch at that point depends almost entirely on where oil prices stand and whether the Iran situation has been fully resolved. Commodity analyst Rory Johnston has estimated that even with the Strait of Hormuz fully reopened, supply chain bottlenecks and infrastructure damage could keep Brent crude anchored in the $80–$90 range rather than returning to pre-crisis levels near $72.
For now, the combination of falling crude prices and the federal tax break offers meaningful — if temporary — relief for Canadian households. Monitor oil news closely over the coming weeks, as developments in the U.S.-Iran talks in Islamabad will be the single biggest factor in whether pump prices continue to fall or spike again.
Sources: Statistics Canada, CAA, Government of Canada, CBC News, Globe and Mail, CNBC. This article is for informational purposes only and does not constitute financial advice. © 2026 MoneySavings.ca
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