Diesel is the single largest variable cost in trucking, and heading into Q2 2026, Canadian carriers face a pricing environment shaped by geopolitical volatility, a rising carbon tax, and uncertain global refinery output. Budgeting accurately for fuel over the next three months is not optional — it is the difference between protecting margins and watching them evaporate.
Where Diesel Prices Stand Today
As of late March 2026, the national average retail price for diesel in Canada sits in the $1.65 to $1.75 per litre range, depending on province. That represents a partial retreat from the $1.99 spike seen earlier in March when Iran-related supply fears pushed crude oil toward $100 per barrel, but it remains well above the $1.50 levels that carriers were budgeting against twelve months ago.
Provincial variation is significant. Alberta continues to offer the lowest pump prices, typically 8 to 12 cents below the national average due to lower provincial fuel taxes and proximity to refining capacity. British Columbia consistently runs 10 to 15 cents above the national figure, burdened by additional provincial carbon levies.
For a carrier running a typical long-haul tractor burning 50,000 litres per year, the difference between $1.65 and $1.75 per litre is approximately $5,000 per truck annually. At fleet scale, these increments are material.
The Factors Shaping Q2 Pricing
OPEC+ Production Decisions
OPEC+ remains the single most powerful lever on global oil prices. The cartel's Q2 2026 strategy centres on a cautious, phased unwinding of previous voluntary cuts. Saudi Arabia and Russia have signalled willingness to bring modest additional barrels to market, but only if prices remain above $80 per barrel — their fiscal breakeven threshold.
The practical effect: OPEC+ is unlikely to flood the market with cheap oil. This puts a floor under crude prices in the $75 to $85 range, translating to a diesel wholesale floor of roughly $1.45 to $1.55 per litre before taxes.
Carbon Tax at $95 Per Tonne
On April 1, 2026, the federal carbon levy rises to $95 per tonne of CO2 equivalent, up from $80 per tonne in 2025. This adds approximately $0.21 per litre to diesel at the pump. The carbon levy was $0.1073 per litre at $50/tonne in 2022 — meaning the carbon tax burden on diesel has roughly doubled in four years.
This is a predictable, legislated cost increase that will continue rising to $170/tonne by 2030. At $95 per tonne, the carbon levy on 50,000 litres of annual diesel consumption amounts to roughly $10,500 per truck per year — a figure that must be recovered through rates and surcharges, not absorbed.
US Refinery Capacity and Crack Spreads
US refinery utilization rates have been running at 88 to 92 percent through Q1 2026, below the 93 to 95 percent pre-pandemic norm. Deferred maintenance, tighter emission regulations, and permanent refinery closures are constraining output.
Crack spreads — the margin between crude oil input and refined diesel output — have widened to roughly $35 to $40 per barrel versus a historical average of $25 to $30. Wider crack spreads keep diesel prices elevated even when crude is stable. The spring refinery turnaround season (April-May) typically adds another 3 to 8 cents per litre temporarily.
CAD/USD Exchange Rate
Canada imports a significant portion of its refined diesel from the United States, and crude oil is priced in US dollars. With the Canadian dollar trading in the $0.70 to $0.72 USD range, every dollar of crude oil cost is amplified by roughly 40 percent when converted to Canadian currency. If the loonie weakens further, diesel prices face additional upward pressure even if US-dollar crude remains flat.
Q2 2026 Price Forecast
Taking all factors into account — OPEC+ restraint, the carbon tax increase, spring refinery turnarounds, and exchange rate headwinds — the forecast range for Q2 2026 is:
- Base case: $1.60 to $1.80 per litre national average, with most weeks in the $1.65 to $1.75 band.
- Upside risk: $1.85 to $1.95 per litre if geopolitical tensions resurface or US refinery outages exceed seasonal norms.
- Downside case: $1.55 to $1.60 per litre if OPEC+ increases production beyond expectations and crude falls toward $70.
Carriers should budget at the $1.72 per litre midpoint for planning purposes, with contingency for spikes above $1.80.
What Carriers Should Do Now
Recalculate Fuel Surcharges
If your fuel surcharge formula is based on a baseline diesel price below $1.60, it is out of date. Update your surcharge tables to reflect a baseline of $1.65 to $1.70 and ensure the per-kilometre surcharge escalates at a rate that actually recovers marginal fuel costs. A surcharge that lags reality by even 5 cents per litre costs a 50,000-litre-per-year truck roughly $2,500 in unrecovered fuel expense.
Use Natural Resources Canada's weekly retail diesel price survey as your benchmark, and tie surcharge adjustments to weekly or bi-weekly updates. Monthly adjustments are too slow in a volatile market.
Build Carbon Tax Into Contract Rates
The carbon levy is not a fuel market fluctuation — it is a tax. Treat it as a separate line item or explicitly include it in base rate calculations. Shippers increasingly understand that carbon pricing is a pass-through cost, and carriers who present it transparently have more success recovering it than those who bury it in a general rate increase.
Explore Fuel Hedging
Fleets running 20 or more trucks should evaluate fuel hedging options. Fixed-price fuel contracts, cap contracts, and collar strategies can lock in a maximum cost per litre for a defined period. The cost of hedging is typically 2 to 4 cents per litre — a small premium for eliminating tail risk on your largest variable cost.
Optimize Fuelling Locations
Provincial tax differentials create real savings opportunities. Fuelling in Alberta or Manitoba instead of Ontario or BC on east-west runs can save 8 to 15 cents per litre. Fuel card programs with network pricing and volume rebates pay for themselves many times over.
Invest in Fuel Efficiency
At $1.72 per litre, every tenth of a kilometre-per-litre improvement in fuel economy saves approximately $2,600 per truck per year. Aerodynamic fairings, low-rolling-resistance tires, automatic tire inflation systems, speed governing, and driver coaching programs all deliver measurable returns that grow proportionally as diesel prices rise.
The Bottom Line
Q2 2026 diesel prices are unlikely to deliver pleasant surprises. The carbon tax floor is rising, OPEC+ has no incentive to crash prices, and the Canadian dollar is not strengthening. Carriers should plan for a $1.60 to $1.80 range, budget at the midpoint, and ensure that every litre of additional cost is recovered through properly calibrated surcharges and contract rates.
Fuel cost management is not about predicting the market. It is about building a rate structure and operational discipline that protects your margins regardless of where the price lands.