Canada Gas Prices Could Jump in September — But Relief May Come Just One Week Later

Canadian drivers could be in for a strange September at the gas pump.

Gas prices have already climbed significantly compared with last year as geopolitical tensions disrupt global oil markets. Now another potential increase is approaching: the temporary suspension of Canada’s federal fuel excise tax is scheduled to end on September 7, 2026.

If the federal government allows the tax to return as planned, Canadians could see gasoline prices jump by roughly 10 to 11 cents per litre in some parts of the country.

But there is an interesting twist.

Just over a week later, another seasonal change could push gas prices back down.

Here’s what Canadian drivers need to know.

Why Are Gas Prices So High in Canada Right Now?

Canadian gasoline prices are influenced by much more than what happens inside Canada.

One of the biggest factors is the global price of crude oil.

The ongoing war involving Iran has created major uncertainty around global energy supplies, particularly in the Persian Gulf. The Strait of Hormuz, one of the world’s most important oil-shipping routes, has faced severe disruptions because of concerns surrounding attacks and regional instability.

Roughly one-fifth of global crude oil and petroleum products normally pass through the Strait of Hormuz, making any disruption there important for global energy markets.

Oil infrastructure, shipping facilities and energy operations across the region have also been affected.

As a result, crude oil prices have moved sharply higher.

West Texas Intermediate crude oil was trading near US$82 per barrel, after climbing from approximately US$75 only a week earlier.

Higher crude oil costs typically make their way down the supply chain and eventually affect what drivers pay at Canadian gas stations.

Canada’s Average Gas Price Is Much Higher Than Last Year

According to CAA figures cited in reports, the national average price for regular gasoline in Canada is currently around $1.67 per litre.

That’s up from approximately:

• $1.64 per litre one week earlier
• $1.33 per litre at the same time last year

That means Canadian drivers are paying roughly 34 cents more per litre than they were a year ago.

For a vehicle with a 60-litre fuel tank, that difference works out to more than $20 extra per fill-up.

And another price increase could soon arrive.

Canada’s Federal Fuel Excise Tax Could Return September 7

Earlier this year, the federal government temporarily removed the federal excise tax on retail gasoline as part of an effort to reduce the impact of rising fuel prices.

The temporary measure began in April and is currently scheduled to expire on September 7.

The federal government has not yet made it clear whether the suspension will be extended.

If the tax returns, Canadians could immediately notice the difference at the pump.

Dan McTeague, president of Canadians for Affordable Energy, estimates that restoring the excise tax could increase gasoline prices by approximately 10 to 11 cents per litre, depending on the region.

For someone filling a 60-litre tank, an 11-cent increase would mean approximately $6.60 more per fill-up.

For families or commuters filling their vehicles several times each month, those increases can quickly add up.

But Gas Prices Could Drop Again One Week Later

This is where September gets interesting.

Canada’s gasoline supply changes depending on the season.

During warmer months, refineries produce summer-grade gasoline, which is designed to reduce evaporation and air pollution during hot weather.

Summer gasoline is generally more expensive to produce.

When temperatures fall, fuel producers transition to winter-grade gasoline.

Winter gasoline contains different components, including greater amounts of less expensive butane. The formulation also makes it easier for engines to start in colder temperatures.

The result?

Winter gasoline is usually cheaper.

Canada’s transition toward winter gasoline begins around September 15 — only about eight days after the federal fuel excise tax is scheduled to return.

The seasonal change could reduce gasoline prices by approximately eight or nine cents per litre in some regions.

September Could Bring a Gas Price Roller-Coaster

That creates an unusual possibility for Canadian drivers.

If Ottawa restores the federal fuel excise tax on September 7, gas prices could rise by approximately 10 or 11 cents per litre.

Then, around September 15, the switch to cheaper winter gasoline could potentially reduce prices by eight or nine cents.

In other words, Canadians could experience a noticeable gas price spike lasting roughly one week before seasonal factors provide some relief.

Of course, gasoline prices depend on many different factors, so the changes may not perfectly cancel each other out.

Global oil prices could rise or fall. Refinery conditions can change. Regional supply differences also affect what Canadians ultimately pay.

The Iran War Remains the Biggest Wild Card

While Canada’s fuel tax and seasonal gasoline formulas can influence prices, the much larger uncertainty remains the global oil market.

The conflict involving Iran has raised concerns about how much oil can safely reach international markets.

If major shipping routes remain disrupted for an extended period, oil supplies could remain tight.

That could keep gasoline prices elevated even after Canada transitions to winter fuel.

The International Energy Agency has also suggested that high prices may reduce global oil demand in the coming months as consumers and businesses cut back on fuel use.

Lower demand would normally put downward pressure on prices.

However, if supply falls even faster than demand, oil prices could still remain high.

That makes predicting Canadian gasoline prices especially difficult.

Could Ottawa Extend the Gas Tax Pause?

Another major question is whether the federal government will actually allow the excise tax suspension to expire.

With gasoline prices already elevated, Ottawa could face pressure to extend the measure beyond September 7.

An extension would potentially prevent the expected 10-to-11-cent increase associated with restoring the tax.

If that happened at the same time Canada transitioned toward cheaper winter gasoline, drivers could instead see more meaningful relief at the pump.

For now, Canadians will have to wait for the federal government’s decision.

What Canadian Drivers Should Watch in September

Three dates and developments could determine where gas prices go next:

September 7: The federal fuel excise tax suspension is currently scheduled to expire.

September 15: Canada’s transition toward cheaper winter-grade gasoline begins.

Global oil markets: Developments involving Iran and the Strait of Hormuz could have an even larger impact on gasoline prices than either domestic change.

That combination could make September one of the most unpredictable months Canadian drivers have seen at the pumps this year.

A tax increase could push prices sharply higher — only for seasonal gasoline changes to bring some of that increase back down days later.

But if global oil supplies deteriorate further, even cheaper winter gasoline may not be enough to provide much relief.

For Canadians already feeling the impact of higher fuel prices, the next few weeks will be worth watching closely.

---

Frequently Asked Questions

Why could gas prices increase in Canada in September 2026?

Canada’s temporary federal fuel excise tax suspension is scheduled to expire on September 7. If the tax returns, gasoline prices could increase by approximately 10 to 11 cents per litre in some regions.

When does winter gasoline start in Canada?

The transition toward winter-grade gasoline generally begins around September 15. Winter gasoline is typically cheaper to produce than summer fuel.

How much could winter gasoline lower prices?

The seasonal transition could reduce gasoline prices by roughly eight or nine cents per litre, although the actual change varies by region and market conditions.

Why is gas so expensive in Canada right now?

Higher global crude oil prices, supply disruptions related to the Iran conflict, refinery costs, seasonal gasoline requirements and taxes are all contributing factors.

Will Canada’s federal gas tax pause be extended?

The federal government has not yet confirmed whether the temporary federal fuel excise tax suspension will continue beyond its scheduled September 7 expiration.