The real reason your diesel costs so much more than gas right now

The price of both gas and diesel dropped in all three Maritime provinces overnight.

HALIFAX – Whenever Halifax commuter Tino Klironomos fills up his car with fuel, it’s always a guessing game when it comes to how much he will have to pay at the pumps.

“You get up, and you look at all the changes by the day,” said Klironomos.

Gas and diesel prices have, in recent weeks, increased and decreased in Canada and around the world, as the United States and Iran inch closer to a final peace deal in a war that began in February.

At one point, diesel was selling for more than $2.30 a litre in some Canadian cities. Now it’s down around $2 and slightly lower across the country, but still relatively high compared to the current price of gasoline.

Fuel analyst Carol Montreuil said there is more than one reason for this trend.

“The federal excise tax that was removed on gas was 10 cents, and on diesel, that same excise tax was four cents,” said Montreuil, who is vice-president of the Canadian Fuels Association. “So, the decrease for diesel was less.”

Diesel prices were also much higher compared to increased costs for gasoline before this latest drop.

“That is directly related to how strong the demand is for that type of product,” said Montreuil.

High-priced diesel has also caused an increase in the cost of transportation within the trucking industry, which continues to be passed on to consumers.

Prices for groceries – most notably produce, imported meat and seafood – are still on the rise.

“Salmon is the No. 1 product in terms of increases,” said Dalhousie University professor and food researcher Sylvain Charlebois. “From the end of May to early June, salmon prices at retail stores are up 80 per cent.”

Klironomos has driven both gas and diesel cars. As he continues to fill up his tank weekly, his assumption is, regardless of what vehicle he owns and what kind of fuel it takes, he will be expected to pay a lot going forward.

“Now we are just in a situation: if you’re going to drive, you are going to have to pay,” said Klironomos.

Both at the national and international levels, there is every expectation the cost of diesel will stay relatively high until there is a change in global supply and demand.

During the summer, a seasonal spike in tourism, construction and long-haul shipping is expected to cause continued escalation in diesel consumption.