Petroleum pricing in Canada — the Q1 2025 report

Retail fuel prices in Canada rose noticeably in the first quarter of 2025, with gasoline hitting a six-month high and diesel reaching its highest level in over a year. Early in the quarter, crude oil prices surged due to sanctions on the Russian oil industry and operational disruptions at major U.S. refineries caused by extreme cold weather. These disruptions, particularly along the U.S. Gulf Coast, led to reduced refined product output and widened crack spreads for gasoline and diesel, which in turn elevated Canadian pump prices. While Canadian refineries operated above 90% utilization, lower refinery activity in the U.S. created supply tightness across North America.

Price increases varied by region, with the most significant impacts seen in western Canada. Vancouver experienced some of the highest retail gasoline prices, peaking at 197.0 cents per litre by the end of March, as limited refinery capacity on the U.S. West Coast constrained resupply options. Atlantic Canada also saw elevated diesel prices, driven by seasonal heating demand and a spike in U.S. distillate consumption. In contrast, central and eastern Canadian fuel prices moved more closely with crude market trends, reflecting a more stable supply situation.

Looking ahead, fuel prices are expected to trend lower through the remainder of 2025, thanks to falling crude oil prices, the removal of carbon taxes in most provinces, and permanent petroleum tax cuts in Ontario and Newfoundland. However, ongoing geopolitical uncertainty — including tariff threats and the potential for a global trade slowdown — could temper those declines. Despite these risks, Canadian consumers could see average gasoline prices fall by over 23 cents per litre year-over-year, while diesel prices may decline by approximately 30 cents per litre, barring any major supply shocks.

Read the full Q1 report from Kalibrate Canada here