Diesel prices have surged due to ongoing global conflicts, making it more expensive for trucks to transport goods across Canada, experts warn. Tej Dulat, from the Canadian Truck Operators Association, highlighted the significant impact on trucking companies, where fuel costs are a major expense. Since the spike in prices following the Russia-Ukraine conflict in 2022, companies have struggled to maintain their margins in the face of soaring diesel prices.
Currently, diesel prices in Canada stand at $2.62 per litre, surpassing last week’s high of $2.52. This marks a significant increase from the previous year’s prices and the top average in 2022. Vancouver faces even higher prices at $2.92 per litre, while the U.S. has seen diesel prices hit a record high of over $6 US per gallon.
Experts point out that the recent rise in oil prices due to geopolitical conflicts is overshadowing concerns about tariffs on Canadian goods. The shortage of diesel, exacerbated by geopolitical tensions, is a major contributing factor to the escalating prices. Notably, Russia’s ban on diesel exports and the temporary closure of Canada’s largest refinery in New Brunswick have further constrained diesel supplies.
The Federal government’s decision to extend the suspension of the federal fuel excise tax, including a tax on diesel, aims to provide some relief. However, industry analysts like Patrick De Haan warn that the current situation could have detrimental effects on the North American economy in the coming months if not adequately addressed.
With the winter approaching, energy analyst Dan McTeague warns of potential further increases in diesel prices, indicating a challenging period ahead for the transportation industry and consumers. The impact of rising diesel prices extends throughout the food supply chain, affecting shipping, storage, and production. Evan Fraser from the University of Guelph’s Arrell Food Institute suggests that the convergence of various factors, including extreme weather conditions, is creating a perfect storm of challenges leading to higher food prices.
Fraser expresses concerns about the long-term implications, foreseeing a possible “new normal” of elevated food prices over the next decade. The current scenario poses significant challenges for low-income Canadians in the short term.
