Retail petroleum prices fell in the second quarter to their lowest levels since 2021, due to lower taxes and crude oil prices.
Kalibrate’s latest Quarterly Report of Petroleum Pricing in Canada reveals a significant drop in gasoline and diesel prices across most of the country in Q2 2025. The removal of federal carbon taxes in April, across all provinces and territories except Quebec, combined with declining global crude oil prices, brought retail petroleum prices to their lowest levels since 2021. Brent and WTI crude benchmarks fell to four-year lows in May before rebounding slightly, and the average Canadian retail gasoline price dropped by 15.8 cents per litre from Q1. Diesel saw an even steeper quarterly decline of 29.4 cents per litre, although refining margins for diesel remained elevated due to tight distillate inventories and reduced biofuel usage in the U.S.
Despite the price drop, regional variations persisted. West Coast markets like Vancouver faced higher fuel prices driven by local refinery issues and limited supply alternatives, while Atlantic Canada experienced some of the largest declines in diesel prices. Looking ahead, Kalibrate forecasts that retail petroleum prices will continue trending downward over the next year, with gasoline expected to average more than 20 cents per litre lower and diesel nearly 14 cents per litre lower than the previous 12-month period, though risks from geopolitical instability could still spark short-term price spikes.
