CALGARY - The high cost of diesel is rippling through Canada’s supply chain, as businesses grapple with rising expenses and police in Alberta investigate a series of unusual fuel thefts.
“We’re seeing prices slip below the $2.60-per-litre mark. But they are still pretty much in record territory across Canada,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
For businesses that rely on goods moving in and out, the increase is being felt well beyond the gas pump.
Evelyne Nyairo, founder of the Calgary-based skincare company Ellie Bianca, said higher transportation costs touch virtually every stage of her business.
“The impact includes ingredients coming in, packaging, labels. It is all the raw materials that we need before we can make our products,” Nyairo said.
“But the impact is twofold because it’s also products going out to our customers.”
She said rising shipping costs are putting additional pressure on the company’s margins.
“We are reducing the number of hours for our staff,” Nyairo said. “We’re just looking internally first to cut off any extras, because we cannot keep increasing prices for the customers.”
The pressure comes as police in Alberta investigate several recent diesel thefts. Calgary police say they’ve received reports of diesel being stolen directly from fuel stations.
“These kinds of thefts are very rare, because they’re actually going into the storage tanks which lie under the forecourt, or in the gas station area,” said Calgary police Sgt. Nick Wilsher.
A separate investigation is underway north of Calgary.
Olds RCMP said a “significant amount” of diesel was stolen from the Westview Co-op Cardlock in Mountain View County on Sept. 23 between 3 and 3:30 a.m.
Surveillance footage shows a large tanker truck pulling up to the cardlock before the fuel was taken, according to RCMP. Police described the vehicle as a triple-axle tanker truck with a two-tone, red-and-white semi chassis and a white tank.
RCMP said the incident comes amid recent high-volume diesel thefts and is recommending fuel stations install anti-siphoning devices in ground-based tanks to help prevent future thefts.
Police have not established that high diesel prices are behind the thefts.
Wilsher said investigators don’t know what ultimately happens to the stolen fuel.
“We can only imagine that they must have somebody who they are intending to sell it to, or they’re looking for a way to be able to sell it on to other locations,” he said.
The thefts come as diesel prices have climbed sharply across Canada.
De Haan said Canadian diesel prices were about $1.86 per litre in June before climbing to roughly $2.65 in recent weeks.
“That’s a substantial increase,” he said.
De Haan attributed the increase to a combination of global factors affecting the supply of refined fuels, including geopolitical tensions between the United States and Iran and restrictions through the Strait of Hormuz; reduced refinery output from China, and Ukrainian attacks on Russian oil refineries.
While drivers of diesel-powered vehicles are paying the increase directly, De Haan said the effects extend much further because of diesel’s role throughout the Canadian economy.
“Much of the global economy uses diesel for supply chains, logistics,” he said. “Everything up and down the supply chain really consumes diesel.”
Farmers across Canada use diesel to harvest crops, while trucks and trains rely on the fuel to move food and other goods across the country.
“The gasoline doesn’t get to a station or gas bar without diesel in a truck,” De Haan said.
That means Canadians who never personally buy a litre of diesel can still feel the effects of higher prices.
“The epicentre of the diesel impact will be at your grocery store, every aisle to be impacted,” De Haan said, adding that higher transportation costs can also affect restaurants, online shopping and retail goods.
For businesses like Nyairo’s, higher fuel costs are adding to pressures that have already been building.
She said tariffs have cost her company a significant share of its U.S. online business, while shipping costs have been rising for several years.
“It is extremely challenging,” she said. “It’s extremely challenging to keep growing in Canada, to keep hiring in Canada, to actually manufacture in Canada.”
Where diesel prices go from here remains uncertain.
De Haan said what happens next will depend largely on developments overseas.
“If the situation does escalate between either the U.S. and Iran and Ukraine and Russia, if there are more impediments to diesel supplies, prices could go right back up,” he said.
