Factory-gate diesel prices double as IPPI climbs 14.5%

The price Canadian refineries charged for diesel fuel in September 2026 was 106.1 per cent higher than a year earlier, Statistics Canada said on Oct. 22, as its Industrial Product Price Index rose 14.5 per cent year over year for a 24th consecutive annual increase.

The index, which measures what manufacturers in Canada receive for goods as they leave the factory gate, rose 2.0 per cent from August to September, after a 1.2 per cent gain the month before, according to the agency’s release in The Daily. Prices of raw materials bought by manufacturers rose even faster, up 4.8 per cent in the month and 27.0 per cent from September 2025.

Most of the September headline came from energy. Statistics Canada said energy and petroleum product prices rose 12.1 per cent in the month, led by refined fuels, and that the resumption of the conflict between the United States and Iran in August continued to push those prices up. Diesel rose 18.4 per cent from August alone, finished gasoline 7.8 per cent and light fuel oils, used to heat many homes in Atlantic Canada and Quebec, 15.4 per cent.

Over 12 months the increases are much larger. Finished motor gasoline was up 45.3 per cent at the factory gate and light fuel oils were up 99.4 per cent, the agency said. On the raw-materials side, conventional crude oil was up 52.2 per cent and synthetic crude oil 73.2 per cent from a year earlier.

Several wire and market outlets, including The Wall Street Journal, reported the 2.0 per cent monthly headline on Thursday. The figures that matter most for households sit further down the release, because diesel is the fuel that moves almost everything Canadians buy. Trucks, trains, farm equipment, fishing boats and construction machinery all run on it, so a doubling in its wholesale price eventually shows up in the cost of food, building materials and delivered goods.

Consumers are already feeling part of it. Canada’s annual inflation rate was 3.1 per cent in September, and gasoline at the pump was 27.8 per cent more expensive than a year earlier, according to the consumer price index Statistics Canada published on Oct. 19. Our province-by-province inflation table shows rates ranging from 2.5 per cent in Ontario to 5.7 per cent in Prince Edward Island. Crude prices have kept climbing since: Brent topped US$111 a barrel on Oct. 20, its highest level since May.

Outside energy, the picture is calmer but not flat. Excluding energy and petroleum products, the index edged up 0.3 per cent in September. Chemicals and chemical products rose 3.8 per cent in the month, with plastic resins up 11.0 per cent and fertilizers, pesticides and other chemical products up 4.1 per cent, which matters for farmers heading into next year’s planting season. Prices for fruit, vegetables, feed and other food products rose 1.1 per cent, the largest monthly increase since May, driven by an 11.6 per cent jump in oilseed cake and meal.

Metals made the next-largest contribution to the yearly increase. Unwrought gold, silver and platinum group metals were up 31.9 per cent, unwrought copper 46.3 per cent and unwrought aluminum 26.9 per cent, Statistics Canada said. For Canadian miners and smelters those are higher selling prices; for manufacturers that buy copper wire or aluminum sheet, they are higher costs.

The index does not measure the direct effect of tariffs. Statistics Canada noted that it excludes sales taxes and tariffs, but that tariffs Canada imposes on imported inputs can indirectly raise the prices Canadian producers charge.

The timing puts more pressure on the Bank of Canada, which announces its next rate decision on Oct. 28. Several major banks now expect a quarter-point increase from the current 2.25 per cent, as our guide to the decision explains. Rising factory-gate prices are one of the signals the central bank watches for inflation that has not yet reached store shelves.

For workers, the squeeze runs both ways. Higher fuel and input costs raise prices at the same time as the job market cools: the economy lost 68,000 jobs in September and the unemployment rate rose to 6.5 per cent, according to the Labour Force Survey. Earnings that do not keep up with a 3.1 per cent inflation rate mean a pay cut in real terms.

How we did this: the figures come from Statistics Canada’s Industrial Product Price Index (table 18-10-0265-01) and Raw Materials Price Index (table 18-10-0268-01) for September 2026, published in The Daily on Oct. 22, and from the September consumer price index released on Oct. 19. Both producer indexes are not seasonally adjusted, so monthly changes can reflect seasonal patterns. The October indexes are due in November.

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