Gasoline Tax - Introduction

This section provides general information on Gasoline Tax including legislative authority, fuel type definitions and remittance requirements.

What amendments have been made to the Gasoline Tax Act?

Amendments to the Gasoline Tax Act have recently been passed in the PEI Legislature (Bill 50).  As a result of these amendments, effective September 1, 2020, marked gasoline and marked diesel may be used in farm trucks, where those farm trucks have been added to the Marked Fuel Exemption Permits as eligible equipment, and where those vehicles are performing agricultural operations. Gas Tax Notice (GTN:303) provides additional details. 

What is Gasoline Tax?

Under the Gasoline Tax Act and Regulations a gasoline tax is charged on all purchases of gasoline and diesel oil used to propel motor vehicles and on all purchases of aviation fuel.

Gasoline is defined as a product distilled from petroleum, which, by burning, develops the power required for operating internal combustion engines, and includes every other liquid product, such as aviation fuel, that fulfils the same purpose and determined to be gasoline, except diesel oil and propane.

Diesel oil is defined as a product distilled from petroleum that is capable of developing the power required for operating internal combustion engines. Diesel oil is also commonly known as semi-diesel oil or fuel oil, and includes furnace oil and any other products determined to be diesel oil.

Aviation fuel is defined as any gas or liquid that is sold to be used or is used to create power to propel an aircraft and includes any product that is designated to be aviation fuel by the regulations.

How is Gasoline Tax collected?

Gasoline tax is collected from petroleum retailers at the wholesale level by petroleum wholesalers. Petroleum wholesalers must register with the Island Regulatory and Appeals Commission (IRAC) to obtain a license to operate in the Province. The petroleum wholesalers must also enter into a Wholesaler Agency Agreement with the Department of Finance to collect and remit gasoline tax.

Registered petroleum wholesalers must remit gasoline tax to the Department of Finance, Taxation and Property Records Division, on or before the 25th day of each month using the Generic Fuel Tax Return as developed by the Canadian Fuel Tax Council. Information on how to complete the return is outlined on Instructions for the Completion of Generic Fuel Collector Report

How do consumers pay Gasoline Tax?

Gasoline tax is included in the pump price of fuel paid by consumers. Petroleum retailers must register with the Island Regulatory and Appeals Commission (IRAC) to obtain a license to operate in the Province. Petroleum retailers are reimbursed for the gasoline tax paid to petroleum wholesalers by collection of the tax from consumers.

What makes up the price of gasoline at the pumps? 

Gasoline pump prices are set by the Island Regulatory and Appeals Commission (IRAC). The formula used to determine pump prices can be found on the IRAC website.