Alberta will suspend its provincial fuel tax beginning Oct. 1, giving motorists and businesses a 13-cent-per-litre break on gasoline and diesel until at least the end of 2026.
Premier Danielle Smith said the measure is intended to ease pressure on households and businesses facing higher transportation and operating costs.
“Alberta already had the lowest fuel prices in the country. Now they are even lower,” Smith said in a statement.
“Affordability is top of mind for families right now. We have their backs.”
The tax will fall from 13 cents per litre to zero on Oct. 1 and remain suspended through Dec. 31. The earliest the province could fully or partially restore it is Jan. 1, 2027.
Smith said the relief will extend beyond personal vehicles to companies that rely on transportation.
“Business owners feel it too,” she said. “Every fleet, every delivery van and every work truck in this province fills up cheaper.”
For a driver purchasing 50 litres, eliminating the provincial tax would represent a direct saving of $6.50 per fill-up. A business buying 1,000 litres of fuel would save $130 in provincial tax.
The reduction is being implemented through Alberta’s Fuel Tax Relief Program.
Under the program, the province collects the full 13-cent tax when the benchmark oil price averages less than US$80 per barrel. The tax drops to nine cents when oil averages between US$80 and US$84.99 and to 4.5 cents when the price is between US$85 and US$89.99.
Collection is suspended entirely when the average reaches at least US$90 per barrel. The calculation is based on 20 trading days leading up to the 15th day of the month before each quarterly adjustment.
The Alberta government said WTI averaged US$90.54 during the latest review period, from Aug. 18 to Sept. 15, triggering the full suspension.
“Starting October 1, we are suspending Alberta’s fuel tax in full,” Smith said. “That is 13 cents off every litre of gasoline and diesel, every single time you fill up.”
Finance Minister Jason Nixon said Alberta’s fiscal position allows the government to provide the temporary relief while global uncertainty continues to affect energy prices.
“With global uncertainty and prices rising, we are ensuring Albertans have the support they need to address the higher costs of everyday essentials,” Nixon said. “It’s relief we’re able to provide thanks to our strong fiscal position, helping us make life more affordable.”
Provincial figures supplied by fuel market data company Kalibrate showed regular gasoline averaging 175.5 cents per litre in Alberta on Sept. 21, compared with a Canadian average of 189.8 cents.
Ontario had the next-lowest average at 181 cents per litre, followed by Saskatchewan at 183.6 cents and Manitoba at 186.2 cents.
The province estimated that removing the 13-cent tax at those prices would bring Alberta’s average to approximately 162.5 cents per litre.
Pump prices, however, are also affected by crude oil costs, refinery capacity, wholesale markets, transportation expenses, local competition and retailer pricing. Those factors can change independently of government taxes, meaning the posted price may continue to move during the suspension.
Alberta NDP Leader Naheed Nenshi said eliminating the tax is a positive step but accused the United Conservative government of delaying relief after the Opposition called for a suspension earlier in the year.
“Danielle Smith is now implementing the very policy that her government has spent months arguing against,” Nenshi said.
The Opposition also criticized the temporary nature of the measure and linked the announcement to the UCP’s recent political difficulties.
“Gas tax relief is a good thing, but it should have been done months ago when families needed it, not when the premier needs it,” Nenshi said.
Earlier in 2026, the province chose to provide a $100 energy rebate to eligible Albertans instead of immediately suspending the tax. Nixon has since acknowledged that the rebate system was difficult for some residents to use and did not work as well as the government expected.
The provincial measure will overlap with Ottawa’s suspension of the federal fuel excise tax.
The federal government has extended its tax pause through Jan. 31, 2027. The federal tax would then return at half its normal rate in February and March before being fully restored on April 1, 2027.
The federal suspension removes 10 cents per litre from gasoline and four cents per litre from diesel. Combined with Alberta’s Oct. 1 reduction, the two measures represent 23 cents per litre in suspended provincial and federal taxes on gasoline and 17 cents per litre on diesel compared with their regular rates.
Alberta will review oil prices again before the end of December. That review will help determine whether the provincial tax remains at zero, returns partially or is fully restored in January.
For drivers, the immediate benefit is clear: 13 cents less in provincial tax for every litre purchased during the final three months of the year. How long that relief lasts will depend on oil prices, government policy and the next quarterly review.
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