Diesel costs are soaring with Canadians in key industries preparing for pain
CBC
The conflict in the Middle East is starting to hurt Canadians at the pumps, but the rising cost of diesel fuel has the potential for even further-reaching consequences at home, affecting truckers, farmers and, inevitably, consumers.
Before the start of the U.S.-Israeli war against Iran, which began on Feb. 28, the average price of gasoline in Canada was about 139.6 cents per litre, according to Natural Resources Canada. As of Tuesday, that had risen to 157.3 cents and is estimated to reach 162 cents by March 17.
The price of diesel has increased by about 33 cents per litre in the same time frame, from an average of 166.3 cents per litre to 199.7 cents as of Tuesday. It's expected to rise to 206.3 cents next week.
“It's going to have an immediate and potentially long-lasting effect on our bottom lines,” said Drew Spoelstra, President of the Ontario Federation of Agriculture.
“We don't have any way to pass these additional costs on. We take the price that we get for a lot of our products.”
The increased costs are a direct result of the conflict in Iran and its government's power to disrupt global oil shipments through the Strait of Hormuz, which has caused the price of oil to reach USD $100 per barrel.
Around 20 per cent of the world's oil and gas supply flows through the strategic chokepoint — 33 kilometres wide at its narrowest with shipping lanes no more than two kilometres wide. Military activity in the area has disrupted shipping, and Iran, which may have placed mines along the strait, has warned vessels not to pass through the waterway, leaving many oil shipments in limbo.
As fuel prices remain unstable, many industries are already feeling the effects.
It hasn’t been an easy year for farmers, according to Spoelstra. The sector has already been hit hard by inflation and the uncertainty caused by U.S. tariffs since the start of the second Trump Administration.
Paying more for the diesel that fuels necessary equipment like tractors and sprayers is “one more straw on the camel’s back,” he said.
Approximately $1.25 billion of farm operating expenses in Ontario went directly to energy in 2024, he said, adding that, currently, farmers are looking at an increase of roughly 40 per cent in those costs.
But fuel is also not the only concern right now. Spoelstra pointed out that shipments of fertilizer are also being tied up due to the disruption, which could be especially harmful as farmers prepare to plant their spring crops.
“Typically things do level out and stabilize eventually, but the prices of these commodities never go down as fast as they go up,” he said.
“Even if this conflict ends tomorrow or next week, it's likely to have a long-lasting effect into the spring and summer seasons for farmers.”
Canadian potatoes could soon reach the Mexican market.
The Alberta government — for the first time — will partially fund the construction and expansion of independent schools in an attempt to create more student spaces.
The Northwest Territories Power Corporation says the Taltson hydro facility is back in service.
Three world leaders — two of them members of the G7 — stood united in opposition Friday to the Trump administration's decision to ease sanctions on Russia's shadow fleet of oil tankers.
A boil water advisory has been issued by Alberta Health Services (AHS) for approximately 500 homes and businesses located in the southwest community of Spruce Cliff, and some areas of Wildwood and Rosscarrock, effective immediately.
Four people in the last decade have died in Canada after giving plasma, and three of those deaths happened in Manitoba, Health Canada says.
The Ontario government has served notice it will cut funding to at least two drug consumption sites in Toronto.
Premier Rob Lantz, Health Minister Cory Deagle and members of the Medical Society of P.E.I. met behind closed doors Thursday in downtown Charlottetown.
Parks Canada is banning boats and other watercraft on several popular lakes and rivers in Banff National Park starting this spring to prevent the spread of aquatic invasive species.
Equipment staging has begun to build a 214 km, $77-million all-season access road to the proposed Coffee Gold mine.
The Canadian economy lost more jobs in February than it has in a single month in the last four years — but Prime Minister Mark Carney says when compared to the United States, we're doing pretty good.
A judge has ruled against a bid for an injunction that sought to pause provincial legislation that forced thousands of striking Alberta school teachers back to work last year.
After a months-long fight with his landlord, Shannon Lucas accepted a $40,000 payout to move out of a North Bay, Ont., townhouse, but says he would give it all back if he could stay.