Petroleum pricing in Canada — the Q1 2024 report

Canadian gasoline prices climbed throughout the first quarter and were pushed higher by rising crude oil prices and expanding refining margins. In contrast, diesel refining margins contracted to an eight-month low, negating the effect of rising crude prices.

Crude oil prices climbed in the first quarter as geopolitical concerns abroad threatened crude oil supplies. Early in the quarter, crude oil prices found strength as disruptions to cargo shipments in the Red Sea added costs due to the necessitation of longer, more expensive
supply routes. Additional concerns for possible oil supply disruptions from the ongoing Israel/Hamas conflict in the Middle East also lifted crude oil prices higher early in the quarter. Later in the quarter, Ukrainian drone attacks on Russian refinery infrastructure threatened petroleum production and elevated prices. On the supply side, continued pledges by the Organization of Petroleum Exporting Countries and Allies (OPEC+) to limit crude oil production to the end of the second quarter raised crude oil prices further. By March, Canadian crude oil prices had reached a five-month high.

Canadian regional gasoline and diesel market overview

Retail gasoline prices increased in all parts of the country in the first quarter, with the most significant increase in western Canada. By March, retail gasoline prices had climbed 25.2 cents per litre in Vancouver from the end of last year and 27.7 cents per litre in Calgary.

Read the full regional overview alongside charts of gasoline and diesel price components by region here.

Canadian fuel market outlook

Looking ahead to the remainder of 2024 and the first quarter of 2025, we will likely see gasoline prices rise in the immediate quarter before trending lower during the winter months. In contrast, diesel fuel prices will likely begin to climb in late summer and peak in early winter before declining. Crude oil prices make up roughly forty percent of gasoline and diesel prices, thus significantly affecting pump prices. Global supply and demand conditions primarily determine crude oil prices and are heavily influenced by geopolitical and international economic factors. Global crude oil production is expected to outpace consumption for most of the following year, leading to an expected slight decline in crude oil prices. However, several factors could change this, such as an extension of the Organization of Petroleum Exporting Countries and Allies
(OPEC+) production limits beyond the end of the second quarter or changes to global economies, which could affect crude oil demand. As well, geopolitical tensions in the Middle East and between Russia and Ukraine are unpredictable and may lead to unexpected swings in oil prices.

Read the full Q4 report from Kalibrate Canada here