All transportation fuels, including natural gas, are subject to GST or HST. There is no federal excise tax on natural gas. This tax is levied at $.04/litre on diesel fuel and $.10/litre on unleaded gasoline. Natural gas is also exempt from provincial road and motor fuel tax in most provinces. In British Columbia, where a carbon tax also applies to fuel sales, natural gas is taxed at a lower rate because it is a lower-carbon fuel.
Fleets also have the option of locking in the natural gas commodity cost. Contracts of up to five years can be set up through natural gas marketers. The cost of the commodity typically represents less than 50% of the dispensed cost of CNG or LNG.