When conflict erupts overseas, conditions that often feel distant ripple across global markets and spill into everyday life. What used to be a routine trip to the gas station has become an expensive gamble for Ontario drivers. As oil prices continue to fluctuate in geopolitical uncertainty between the U.S. and Iran, questions arise about the long-term stability of gasoline prices and whether a faster transition towards electric vehicles (EVs) is required to reduce this reliance.
The Strait of Hormuz is a narrow waterway between Iran and Oman and is responsible for the transport of about 20 per cent of the world’s oil supply.
As the temporary ceasefire between Iran and the U.S. remains fragile, Iran’s foreign minister announced Friday that the commercial vessel passage through the Strait of Hormuz is open. But President Donald Trump assured the U.S. naval blockade on Iran will remain in place.
Despite the recent easing of tensions, pump prices continue to financially strain Canadians. The average price of gas in Canada stands at 174.6 cents per litre as of April 17, up from 129.5 cents per litre last year.
The Canadian federal government announced it will temporarily suspend the fuel excise tax on gas and diesel starting on April 20. Lasting until Sept. 7, the brief suspension is estimated to save Canadians 10 cents per litre on gas and four cents per litre on diesel.
Despite the fuel tax pause, gas prices are set to rise once again.
As of April 15, the more expensive summer fuel blend has reached gas stations across the country. The seasonal regulation will increase the price of regular gasoline by roughly 10 cents per litre, effectively eliminating the savings from the recent federal fuel suspension.
"At this stage, it looks like we’re in for a very, very expensive summer,” said Dan McTeague, the president of Canadians for Affordable Energy, in an interview with CTV.
Ontario drivers will continue to face pressure at the pumps despite efforts for relief.
“Canadians are in desperate need of relief at the moment,” McTeague said in a news release. “But this is a drop in the bucket.”
One question remains as fuel prices are rising and remain unpredictable: Is it time to switch from pump to plug?
The transition to EVs in Canada is not a feasible decision for many. The expensive upfront cost of electric vehicles, paired with the lack of accessible charging infrastructure, stands as a major barrier for drivers.
But according to CAA, EV drivers save approximately $3,000 a year on fuel, with ownership lowering personal vehicle greenhouse gas emissions by over 60 per cent.
Since EVs rely on electricity, when energy prices rise, the cost of electricity does not rise at the same rate as oil prices, framing EV ownership as more sustainable and predictable in the long term.
While there are federal incentives available to urge this transition, they may not be enough to convince loyal gasoline-powered drivers to make the switch. The Electric Vehicle Affordability Program (EVAP) was introduced Feb. 16 to encourage Canadians to adopt EVs. There are two levels, offering up to $5,000 for battery-electric vehicles and $2,500 for plug-in hybrids.
But are these incentives sufficient, and should they be reassessed amid the current financial strain weighing on drivers?
Canada cannot control the state of global tensions, but it can prepare for the economic consequences. Investing in more accessible and widespread EV infrastructure, increasing incentives and cutting costs of at-home charging stations can push the transition towards EV adoption.
Oil price fluctuations should serve as a warning rather than a temporary inconvenience. Our reliance on the global oil supply leaves Canadian drivers in a compromising position when conflict arises. The next threat to higher gas prices is no longer a matter of if, but when.
Accelerating the transition toward electric vehicles can help prevent financial shocks caused by volatility in the global oil market.
