Canada’s gas prices are surging amid the Iran war and Carney says relief could be coming

The federal government is looking at ways to support Canadians as oil prices rise amid the ongoing war in the Middle East, Prime Minister Mark Carney said Tuesday.

Oil prices have surged since the U.S. and Israel attacked Iran on February 28. The Canadian Automobile Association (CAA) gas price tracker said on Tuesday that gas prices across Canada averaged more than $1.80 per litre, compared with about $1.32 a year ago and $1.51 on March 7.

Carney said at a press conference on Tuesday that his government wants to help “cushion the blow” for Canadians.

“There’s a global market, and those countries that have lots of oil and gas see their prices go up alongside with those who don’t have that oil and gas. It’s the same shifts up in prices in the United States as well,” Carney said Tuesday.

“The question becomes — and this is what the government’s focused on — is how long is this going to persist, and what can we do to help cushion the blow for Canadians? And that’s something we’re looking at.”

The conflict has cut off flows of crude through the critical Strait of Hormuz and shut down energy production across parts of the Middle East. About one-fifth of the world’s oil supply comes through that strait, which connects the Persian Gulf to the Gulf of Oman, and then the Arabian Sea.

Conservatives have called on the Liberals to give Canadians some relief at the pumps by suspending federal taxes on gas and diesel for the rest of the year.

Conservative Leader Pierre Poilievre said last week lifting the fuel excise tax, clean fuel standard and GST surcharges from gas and diesel would save consumers about 25 cents a litre.

That cut, he said, would amount to savings of “about $20 a fill-up, and $1,200 for the average family of four between now and the end of the year.”

Poilievre said in a letter to Carney on Tuesday that rising oil prices have been a “massive windfall” for the government. He again called for the suspension of the federal fuel excise tax, the GST on gas and diesel and the permanent elimination of the clean fuel standard tax and industrial carbon tax.

“This would not only help drivers,” said Poilievre. “Lower diesel prices would reduce the cost of shipping food, homebuilding materials and other essential goods across the country, lowering costs throughout the economy.”

This report by The Canadian Press was first published April 7, 2026.