What Drives Gasoline Prices in Cambridge, Ontario

Last reviewed: November 2026

Cambridge Now once published a daily list of local pump prices and an editorial explaining why it did so. The editorial urged drivers to compare stations before filling up, and this page leaves that advice out. It covers the general factors that determine what gasoline costs in a Canadian city such as Cambridge.

Quick facts

Where the price comes from

Reference sources describe gasoline pricing as the result of several inputs: the price of crude oil, the cost of processing it, the cost of getting fuel to stations, local demand, the strength of the currency, local taxation or subsidy, and the supply available in a region. Fuel is traded worldwide, so wholesale prices tend to move together across countries. Most of the difference people notice at the pump comes from national pricing policy and taxes.

For the United States, the Energy Information Administration lists the main components as crude oil, refining costs and profits, distribution and marketing, and taxes. Marketing and distribution is typically in the range of 11 to 15 percent of the price per gallon there. Canadian shares differ and are not given here.

Fuel taxes in Canada

Canada is unusual in charging excise taxes on gasoline, diesel and other motor fuels at more than one level. The federal government charges an excise tax. Most provinces and territories add their own fuel tax, and a few large metropolitan areas elsewhere in the country add a local one. Sales tax is then applied on top: GST, or the harmonized HST where a province has combined it with its own sales tax. These taxes are calculated on a price that already includes the excise taxes.

The federal excise tax raises roughly $5 billion a year, and GST on gasoline and diesel adds about $1.6 billion. Provinces together collect about $8 billion annually from fuel excise. About $2 billion of the federal excise money goes into the Gas Tax Fund for municipal infrastructure. In Ontario, 2 cents of each litre's provincial tax is distributed directly to municipalities.

The federal carbon charge on fuel was set to zero from April 1, 2025, a change that applied in Ontario along with several other provinces and territories. Tax levels have shifted over the years, so historical prices are not directly comparable.

Why prices differ between stations

Stations in the same city can post different prices on the same day. Reference sources point to local competition, the cost of the last delivery, and the brand's own pricing decisions as contributing factors, but no neutral source consulted for this page measured how much each one matters in Cambridge. A claim that independent stations hold down prices across the market is a common argument and was part of the original editorial, but it is not established here.

Cambridge in context

Cambridge is in the Waterloo Region and is made up of three older communities, Galt, Preston and Hespeler, that were amalgamated in 1973. Its drivers face the same provincial and federal tax structure as the rest of Ontario, so any price difference within the city comes from the retail market, since the tax rules are the same.

Frequently asked questions

What is the main factor behind gasoline prices? The cost of crude oil, followed by refining, distribution and taxes.

Does Canada tax gasoline differently from the United States? Both tax it, but Canada layers federal excise, provincial fuel tax and GST or HST, and the sales tax applies to the already-taxed price.

Do municipalities receive any of the fuel tax? Yes. Part of the federal excise revenue goes to the Gas Tax Fund, and in Ontario 2 cents per litre of provincial tax goes to municipalities.

Did the carbon charge on fuel change? The federal fuel charge was set to zero effective April 1, 2025, including in Ontario.

Is there a single price for all of Cambridge? No. Stations set their own prices, and they can differ on the same day.

Sources

Wikipedia articles on gasoline and diesel usage and pricing, motor fuel taxes in Canada and Cambridge, Ontario.