Diesel prices are surging amid ongoing global conflicts, leading to significant cost increases for trucking companies in Canada, experts warn. Tej Dulat, from the Canada Truck Operators Association, expressed concerns about the impact on consumers as trucking companies are forced to pass on the higher fuel costs.
The current diesel prices in Canada sit at $2.62 per litre, marking a substantial increase from last year’s prices. In Vancouver, prices have soared even higher to $2.92 per litre. The spike in diesel prices is attributed to geopolitical conflicts rather than tariffs on Canadian goods, according to experts.
The shortage of diesel has been exacerbated by reduced exports from the Persian Gulf region and the ban on diesel exports by Russia following damages to oil refineries in Ukraine. In addition, maintenance at Canada’s largest refinery, the Irving Refinery, is further limiting diesel production.
To alleviate the impact, the federal government has extended the suspension of the federal fuel excise tax on diesel. However, experts believe that more actions are needed to address the escalating costs. Patrick De Haan, from Gas Buddy, warned that failure to address the situation could have severe economic consequences.
As winter approaches, concerns are growing over the potential for even higher diesel prices. Energy analyst Dan McTeague highlighted the likelihood of a costly winter ahead for various industries and consumers. Evan Fraser of the University of Guelph emphasized the ripple effects of diesel price hikes on the entire food supply chain, suggesting a challenging future with rising food prices due to multiple contributing factors.
The convergence of various challenges, including extreme weather affecting harvests, is creating significant pressure on food prices. Fraser expressed concerns about a potential long-term impact on food prices, particularly affecting low-income Canadians.
