Heating oil costs climb from pre-election change

The Gallant government says it is still studying what to do about heating oil following a pre-election loosening of price regulations by the former Alward government, even though an enormous mid-winter price gap has opened up between New Brunswick and other regulating provinces.

"The Department of Energy and Mines continues to monitor the situation regarding home heating oil costs,"  Energy Minister Donald Arseneault said in a statement issued to CBC News.

"We want to ensure that the decisions that took effect earlier this year by the previous government are working properly for retailers, businesses and homeowners."

​Last week, the regulated maximum price for heating oil in New Brunswick was set by the Energy and Utilities Board at 93.6 cents per litre plus HST.

That's 17.7 cents higher than the maximum price set simultaneously by the Newfoundland and Labrador Board of Commissioners of Public Utilities for the area in and around St. John's. 

It's a record price disadvantage suffered by New Brunswick consumers, unseen in the 28 years pricing records in the two provinces have been kept.

Bob Brittain, a Rothesday resident who heats his house with oil, said he is mystified by the difference. 

"Seventeen cents when it comes over a full winter adds up to quite a bit," said Brittain. 

"It just doesn't make any sense to me. You're talking about that much smaller of a province. We're an industrial province, I don't understand it."

​Brittain lives about 15 kilometres from the Irving Oil Ltd. refinery — Canada's largest — and was billed $630 for his last delivery of oil on Jan. 29.

It was $118 more than the legal maximum price allowed in St. John's on the same day for the same quantity and $80 over the legal price in more remote Newfoundland communities, such as Fogo Island and St. Anthony. 

It was also $70 over the legal price to deliver the same amount of oil anywhere in Prince Edward Island on Jan. 29.

'I'm not really happy'

Elvin Holmes, a Fredericton resident who burns 2,800 litres of oil a winter, said he'd like to see something done to narrow the price differences that have opened up between New Brunswick, Prince Edward Island and Newfoundland and Labrador. Nova Scotia doesn't regulate heating oil.

"I'm not really happy with it when I can see places like P.E.I. and other places eight, nine and 10 cents a litre cheaper and if I put 600 litres in that's $60 that could be in my pocket," said Holmes.

The major price gaps in heating oil opened up this winter following changes made by the Alward government to the pricing formula just days before it called last year's provincial election. 

The changes gave large oil companies that wholesale the option to charge small retail companies more when they fill up their delivery trucks, which the retailers are then allowed to pass along to consumers. 

The change effectively raised maximum prices 10 cents per litre this winter but in December Arsenaeult said he wanted to watch how the market responded to the new pricing structure.

Many customers, including Brittain and Holmes immediately began being charged at the new limits.

But after eight weeks of watching that and the record 18-cent price gap open up between New Brunswick and Newfoundland and Labrador, Arseneault said he is still evaluating what to do.  

"Again, I, along with departmental staff, will continue to closely monitor the situation and adjust if necessary as we move forward," Arseneault said in his statement..