Alberta suspends fuel tax after months of refusal

Posted on October 1, 2026 by admin

By Patrick Wachter
Southern Alberta Newspapers

Starting Oct. 1, Albertans will save the full 13 cents per litre provincial fuel tax at the pump as global uncertainty and trade conflicts push energy prices higher.

The suspension of the tax on gasoline and diesel will remain in place until the end of the year to help families, commuting workers and local businesses, the province says.

“We have heard from Albertans who are facing continued high costs at the pump, so we are taking action to help with the cost,” Premier Danielle Smith said in a news release. “Suspending the provincial fuel tax will save drivers, families and businesses 13 cents per litre every time they fill up for the rest of the year.”

The government had previously refused to lift the tax when prices rose after the Trump administration started a war with Iran, reiterating that stance as recently as a few weeks ago. The federal government’s gas tax has been suspended since April 14 and the suspension has been extended until January.

Strong energy sector revenues putting the province in a solid fiscal position are allowing leaders to provide direct relief, according to the provincial finance minister.

“With global uncertainty and prices rising, we are ensuring Albertans have the support they need to address the higher costs of everyday essentials,” Jason Nixon, President of Treasury Board and Minister of Finance, said.

Business groups welcomed the decision. Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce, noted lower fuel costs will help commercial operators manage expenses. 

To ensure savings reach consumers, provincial officials will monitor retail gas stations. Companies caught price gouging face court fines up to $300,000, or two years in jail.

As of Sept. 21, the average retail gas price in Alberta stood at 175.5 cents per litre. With the reduction applied, pump prices are expected to drop to approximately 162.5 cents per litre.

NDP Leader Naheed Nenshi criticized the government for reversing course after months of delay.

“For many, many months, we have been calling for a reduction in the gas tax,” Nenshi said in a release. “We are deeply thankful that they are finally doing the right thing and putting a little bit of money back in Albertans’ pockets, but what is up with this government?”

Nenshi noted the tax cut could save a two-car family $200 to $300, questioning why officials rejected the measure 19 days earlier.