Sep 24, 2026
Canada produces more crude oil than its refineries can process, yet much of the diesel and gasoline sold in the country’s biggest cities still comes from south of the border, according to statistics released by the Canada Energy Regulator. That’s why a comment out of Washington this week matters for your wallet — even if you’ve never filled a diesel tank.
On September 22, U.S. Treasury Secretary Scott Bessent said the Trump administration is examining whether a full or partial ban on diesel exports is feasible. Speaking to reporters, President Trump said he supports a ban, and that a decision would come quickly “one way or another.”
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No decision has been made or details released, so it’s unclear if any restriction would apply to shipments to Canada — but with Canadian diesel prices already at record highs, the threat of even higher fuel costs, due to trade restrictions, is very real.
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How high are diesel prices in Canada right now?
Diesel prices across Canada hit a record $2.75 per litre on September 17, according to Kalibrate, a fuel-price analytics firm. Natural Resources Canada (NRCan) data show diesel is more than $1 per litre higher than a year ago and above the 2022 peak weekly average of $2.30.
In the U.S., diesel has climbed to a record US$6.53 per gallon, almost US$3 above last year’s level, according to AAA data. Wars in Eastern Europe and the Middle East have cut global refining capacity, and tanker traffic through the Strait of Hormuz remains constrained.
A ban would aim to keep more diesel in the U.S. with the intention of pulling American fuel prices down.
But not everyone agrees — and this matters for the consumer. In a statement released September 22, the American Petroleum Institute, the U.S. oil industry’s main lobby group, warned that restricting exports could worsen refining problems and ultimately hurt consumers.
For Canada, the bigger worry is fewer barrels crossing the border into an already tight market.
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Which Canadians are most exposed to a U.S. diesel ban?
In 2025, Canada imported 485,000 barrels per day of refined petroleum products — such as gasoline, diesel and jet fuel — and 79.6% came from the U.S., according to the Canada Energy Regulator (CER), the federal agency that oversees energy infrastructure and trade.
Most of what Quebec and Ontario import is transportation fuel. Quebec alone brought in 103,000 barrels per day, Ontario 36,000 and British Columbia 34,000.
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Atlantic Canada faces a second pressure point: home heating oil, a distillate fuel closely related to diesel. Fuel oil made up 28% of residential heating energy in both Nova Scotia and Prince Edward Island in 2023, compared with just 2% nationally, according to the Government of Nova Scotia’s analysis of data from Statistics Canada. And the heaviest heating season is only weeks away.
Will higher diesel costs show up in your grocery bill?
Even if you don’t live in an Eastern Canada province, you could still pay the price for Trump’s diesel restrictions.
While grocery inflation started to cool during the summer months. According to Statistics Canada, grocery prices rose 2.8% year over year in August, down from 3.1% in July. It was the first time since July 2024 that grocery prices rose more slowly than overall inflation. With Trump’s latest threats, this relief may not last.
It’s not just consumers watching the cash register: the Bank of Canada (BoC) is watching the same risk. It held its policy rate at 2.25% on September 2, but Governing Council members agreed the risk of inflation spreading to other goods and services had risen, and noted that refinery margins were unusually high.
What relief is already in place?
To help ease ongoing cost of living increases, Ottawa has extended the suspension of the federal fuel excise tax until January 31, 2027. The pause saves 4 cents per litre on diesel and 10 cents per litre on gasoline, with half the regular rate returning February 1 and the full rate on April 1, 2027. While this certainly helps, it’s hard to ignore that 4 cents is a small offset against a yearly jump of more than a dollar per litre.
How should Canadians prepare for a possible diesel shock?
Your exposure depends mostly on where you live and how you heat your home.
If you’re in Ontario, Quebec or Atlantic Canada, heat with oil, drive a diesel vehicle or run a business with delivery costs, it may pay to act before winter demand peaks. In Western Canada, where refineries run largely on domestic crude, you may feel it mainly through grocery prices and any ripple effect on interest rates.
Remember, the ban isn’t a done deal. But the supply chain it could disrupt runs through Canada’s largest population centres, and planning now leaves you more options than scrambling in January.
What to do now
- Call your heating oil supplier: Ask about budget billing or fixed-price plans before winter demand peaks, but read the terms — locking in near a record high can backfire if prices ease
- Stock up on staples you already use: Buying shelf-stable groceries while store prices are rising more slowly may soften a later jump
- Review variable-rate debt: If a rate hike would strain your budget, talk to your lender about fixed-rate options before your next payment reset or renewal
- Check for provincial heating help: Several provinces offer heating assistance for lower-income households, but eligibility rules and deadlines vary
- Small business owners: Review fuel surcharges and carrier contracts now so a diesel spike doesn’t erase your margins
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Romana King, Senior Editor at Money.ca, also writes for various North American publications and the RKHomeowner blog. Her book, House Poor No More, is an Amazon bestseller and five-time award winner, including the 2022 New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award.
