Diesel fuel prices are putting renewed pressure on Canadian transportation companies, with higher fuel surcharges now feeding into trucking, rail, courier and delivery costs.
The increase follows a sharp rise in international oil and refined-fuel prices linked to continuing disruption around the Strait of Hormuz. The latest movement is being felt most directly by businesses that move goods by truck, but the effects can also reach retailers and consumers through shipping charges and operating costs.
Table of Contents
Diesel fuel costs climb across transportation networks
Canadian National Railway’s weekly fuel-surcharge schedule shows the U.S. on-highway diesel benchmark reached US$6.285 per gallon for the week effective September 21, 2026. CN’s corresponding intra-Canada intermodal surcharge rose to 40.41 per cent, up from 38.11 per cent the previous week and 35.12 per cent two weeks earlier.
The railway’s monthly schedule also lists an October intra-Canada intermodal surcharge of 34.20 per cent, based on an August average diesel benchmark of US$5.462 per gallon. The different figures reflect the use of separate weekly and monthly formulas rather than a contradiction in the data.
Other transportation operators are also adjusting their charges. Canada Post listed a 44.50 per cent domestic parcel fuel surcharge for the week of September 21 to 27, compared with 41 per cent the previous week.
Courier and freight companies commonly use fuel surcharges to pass part of their changing operating costs to customers. Those charges can affect manufacturers, wholesalers, retailers, farms, construction firms and households paying for deliveries.
Canadian pump prices vary by region
Prices at the pump are not uniform across Canada because of differences in regional supply, taxes, transportation distances and local market conditions.
Petro-Canada’s rack-price schedule effective September 19 listed ultra-low-sulphur diesel at 212.10 cents per litre in Halifax and 231.60 cents per litre in Montreal and Quebec City, before retail taxes and other costs.
Prince Edward Island’s regulator reported a minimum self-serve diesel price of 283.4 cents per litre on September 19. The province’s posted wholesale calculation put the diesel price at 239.4 cents per litre after the listed provincial tax and other adjustments.
These figures are wholesale or regulated reference prices rather than a single national average. They show why the impact can differ significantly between provinces and between urban and remote markets.
Why diesel has become a wider inflation concern
Diesel is a central operating cost for long-haul trucks, buses, farm equipment, construction machinery, trains, ships and some backup power systems. A sustained increase can therefore spread beyond the price paid by drivers at fuel stations.
For trucking companies, the immediate impact depends on fleet efficiency, route length, contracts and whether a customer accepts a fuel surcharge. Larger carriers may have formal adjustment mechanisms, while smaller operators can face a cash-flow squeeze when fuel bills rise before they are paid for completed loads.
Higher transportation costs do not automatically translate into an equal increase in grocery prices. Fuel is only one component of the final price, alongside labour, storage, packaging, rent, insurance, financing and wholesale margins. However, diesel can add pressure at several stages of the supply chain at the same time.
Businesses that do not have a fuel-adjustment clause in their contracts may be more exposed. Some may absorb the increase temporarily, while others could raise delivery fees or renegotiate rates.
Federal tax relief provides a limited cushion
The federal government announced on September 15 that the temporary suspension of the federal excise tax on diesel and aviation fuel would be extended until January 31, 2027. From February 1 through March 31, 2027, half of the regular tax rate is scheduled to apply.
The diesel excise tax had been suspended at a saving of four cents per litre. The measure reduces the tax component of the price but does not offset the much larger changes caused by crude oil, refining, shipping and wholesale-market conditions.
The federal government has also cancelled the consumer carbon price, but provincial fuel taxes and other charges continue to vary across the country.
What happens next for diesel fuel prices
The direction of diesel prices will depend heavily on how quickly oil flows through the Strait of Hormuz recover and whether alternative export routes can handle more supply.
The U.S. Energy Information Administration said in its September outlook that Middle Eastern oil production was expected to rise as flows through the strait gradually increased and alternative routes were used. It also warned that restrictions could persist through the end of 2026, keeping regional production below pre-conflict levels.
The agency expects distillate production to remain below the previous year’s level in the near term, contributing to low inventories and elevated diesel prices. That suggests transportation companies may continue facing volatility even if crude oil prices ease from their recent highs.
For Canadian consumers, the most visible effects may appear first in delivery fees, freight bills and the prices of goods moved over long distances. Whether those costs remain elevated will depend on fuel markets, contract adjustments and the duration of the international supply disruption.
Frequently Asked Questions
Why are diesel fuel prices rising in Canada?
Global oil and refined-fuel markets have been disrupted by continuing conflict and shipping restrictions around the Strait of Hormuz, while distillate inventories remain under pressure.
Will higher diesel prices increase grocery prices?
They can add pressure to grocery prices because trucks and other freight systems use diesel, but fuel is only one part of the final retail price.
How much is Canada’s federal diesel tax relief worth?
The temporary suspension reduced the federal diesel excise tax by four cents per litre. The government has extended the suspension until January 31, 2027.
Why do fuel surcharges differ between companies?
Companies use different benchmarks, averaging periods and formulas. Some calculate charges weekly, while others use monthly diesel-price averages.
Could diesel prices fall soon?
Prices could ease if oil flows through the Strait of Hormuz improve and inventories recover, but supply restrictions and low distillate stocks may keep the market volatile.
Fact-Checked: Key fuel-price, surcharge, tax-relief and market-outlook details were checked against government, transportation-company and energy-agency information.
Disclaimer: Diesel prices and fuel surcharges vary by province, supplier, contract and date, so the figures cited are reference points rather than a national retail average.