Holt says province could scrap price-setting law on gas
N.B. premier says removing maximum price regulations could spur competition, drive down prices
Premier Susan Holt has raised the possibility of eliminating the regulation of retail gas prices in New Brunswick as a way to drive down the cost to consumers.
Holt brought up the idea while responding to criticism from Opposition Leader Glen Savoie that the elimination of the so-called "carbon cost adjustor" — saving consumers four cents a litre on gas — might have unintended consequences.
In 2022, the adjustor became part of the price-setting formula used by the Energy and Utilities Board to set the maximum price of gas every week.
It requires the board to let gasoline producers pass on the cost of federal clean fuel standards to consumers via the board's mechanism. That cost is 4.6 cents per litre this week.
Holt said last Thursday the EUB may have other ways to force consumers to keep paying that cost and suggested it may be better to scrap the provincial price-setting system altogether.
"It's certainly a possibility. We want to look at whether it's serving New Brunswickers," Holt said.
"And I think right now the first-glance data we have doesn't suggest that it's keeping the prices any lower, [or is] any more beneficial to New Brunswickers than jurisdictions that have an unregulated fuel price, because competition drives that."
Holt said most gas retailers tend to set their prices at or near the weekly maximum set by the board, and eliminating the regulation would create a more competitive marketplace.
"Removing the regulation means that retailers start to compete for our business, and that may see a drive to a lower price than we see today," she said.
But there's no guarantee that would happen, and Holt acknowledged scrapping price regulation altogether would "potentially" let producers resume passing the cost of the federal fuel standards on to consumers through the supply chain.
However, she said the more likely outcome would be free-market pressures driving retailers to lower their prices.
Holt's predecessor, Progressive Conservative Blaine Higgs, said in May his government was reviewing whether to scrap the price-setting law, called the Petroleum Products Pricing Act.
At the time, Holt responded that the discussion should not happen "behind closed doors" and should involve the public.
"They should be able to see what's being said, what's being suggested, and they should be able to weigh in on alternatives or options," she said in June.
Premier
Susan Holt has raised the possibility of eliminating the regulation of
retail gas prices in New Brunswick as a way to drive down the cost to
consumers. (Jacques Poitras/CBC)
Holt's government introduced legislation last week to repeal the carbon adjustor, which was adopted by Higgs in 2022.
Savoie said in his official response to the Liberal speech from the throne that without the adjustor in place, producers will still pass the cost down the supply chain – but now it will hit small, locally-owned gas stations, endangering already thin profit margins.
"The retailers will not be able to deal with the pressure that's going to be caused by the changes the government is going to put into place. They're not going to be able to adapt," Savoie said, predicting some gas stations would close.
"It is going to cause some of those retailers to take that infrastructure out and say 'my business can no longer handle the loss.'"
Energy Minister René Legacy said last Wednesday the repeal of the adjustor will take effect as soon as the bill is passed, likely before Christmas, which should see the 4.5 cents per litre come off the price by the end of the year.
But Holt said the next day that the EUB has other mechanisms that could continue to pass the cost to consumers, and her government would need to see if it can stop that from happening.
"There's lots we can consider," she said. "We don't have all information we'd like from the EUB."
Opposition
Leader Glen Savoie said in his official response to the Liberal speech
from the throne that without the adjustor in place, producers will still
pass the cost down the supply chain. But now it will hit small,
locally-owned gas stations, endangering already thin profit margins. (Ed Hunter/CBC)
Asked if the government should have sorted that out before introducing the bill, the premier said that it was "sending [the issue] back to the EUB, and we don't know how they're going to act on it. It shouldn't, and it's not our hope that it works its way back to consumers."
She agreed with Savoie that it "absolutely" is a concern that some gas retailers could close with the adjustor gone.
"That's why there's work to be done with the EUB and with others, to see how they're going to react to this and what choices they'll make."
The Petroleum Products Pricing Act was adopted in 2006 and while it doesn't lead to cheaper gas, it smooths out dramatic fluctuations in the price at the pumps that can happen during swings in the commodities market.
The EUB uses a formula, based on a benchmark market price, to set the maximum price once a week, taking effect every Thursday at midnight.
Green Party Leader David Coon said Holt's bill repealing the carbon adjustor should have included language to ensure the EUB did not pass the clean-fuel costs to retailers and left them with producers.
"The EUB law can be amended by this legislature to give them the power to do that. This is the legislature. They're the government," Coon said.
ABOUT THE AUTHOR
David Amos
Reply to David Amos
Well put.
David Amos
Reply to Don Corey
Welcome back to the circus
Content Deactivated
"Seems Ms. Holt agrees with the carbon tax, freezing bank accounts, and all of those new liberal/prog..."
Bob Leeson
Reply to Frank Blacklock
No one who obeys the law has their bank account frozen in Canada.
Ralph Skavinsky
Reply to Frank Blacklock
?? Sorry but what has that got to do with the subject at hand
Don Corey
Reply to Bob Leeson
That is a false statement.
David Amos
Reply to Don Corey
Yup
Ronald Miller
The riding of Quispamsis is quickly realizing their mistake now.
Ronald Miller
Reply to Ronald Miller
Bobby, have you taken his poster down yet?
Ronald Miller
Reply to Ronald Miller
If a moderator is paying attention the account I am replying to is a mimic of mine and based on your Submission Guidelines should be removed.
Graham McCormack
Reply to Ronald Miller
I would say they are quite happy right now but you keep being you.
Don Corey
Reply to Ronald Miller
Why? Higgs was swinging way to far to the right. I'm a PC but have had enough of him; would have voted independent if I had been voting in that riding.
David Amos
Reply to Don Corey
I resemble that remark
Gas is going way way up anyways. Who cares what she does. This is not anything new. Gas will be over 3 dollars a litre soon enough and we all knew it.
Graham McCormack
Reply to Shawn Tabor
You base that on what exactly?
Scott A.
Reply to Graham McCormack
it is approaching $2/liter now and it did not take too long to get there ...
more Taxes on Fuel in April ...
as overzealous Greens, like Trudeau, get their way, less Oil production, not much less demand ... it is not Rocket Appliances ...
Akimbo Alogo
Reply to Shawn Tabor
"Who cares what she does" - the taxpayers care. Perhaps you should try being one.
Graham McCormack
Reply to Scott A.
Where do you live? Gas is not approaching $2.00 a liter.
Don Corey
Reply to Shawn Tabor
Gas is actually about the same price as a year ago, and that includes Trudeau's carbon tax increase. It should go down 4 cents/litre when Holt removes the Irving clean fuel adjustor clause that Higgs gave us.
David Amos
Reply to Akimbo Alogo
He pays lots of taxes
Scott A.
the Government is going to remove Carbon Taxes ... I doubt it ...
in Fact the Liberal Government is going to increase taxes again in April ...
I hope the Liberals never ever get in again, loathe them and their supporters ...
Eddy Geek
Reply to Scott A.
No argument, however, what plan does wee Pierre have to deal with, well anything?
It is all just more "coke vs pepsi" between the libs and the cons; No matter which is in office, they all end up the same flavour
Ronald Miller
Reply to Eddy Geek
Fortunately for Canadians, there will only be one JT, and his legacy will be that of the worst PM in Canadian history, and the next worse is not even close.
Eddy Geek
Reply to Ronald Miller
JT is terrible, no argument, but to suggest he's worst than Harper of Mulroney is laughable
Course, you still things Higgs was the best thing to happen, yet he couldn't even hold onto his own riding
Don Corey
Reply to Ronald Miller
True.
Don Corey
Reply to Scott A.
The good news is that the carbon tax will be history soon after the next federal election. Then we'll see both a big reduction at the gas pumps and a subsequent lowering of the Canada inflation rate.
David Amos
Reply to Eddy Geek
I concur
Why not demand her bosses in Ottawa scrap the carbon taxes?
Denis Reagan
Reply to Frank Blacklock
Because, unlike Mr. Axe the Facts, she is aware of the need to do something about global warming.
ralph jacobs
Reply to Frank Blacklock
That would make a big saving but I bet the price at the pumps would stay the same because we can be gouged.
Ronald Miller
Reply to Denis Reagan
If you think punishing Canadians will have any impact on global anything you are out to lunch on the subject.
Denis Reagan
Reply to Ronald Miller
Canadians are nothing more than Trumpians. We're much brighter than that and understand the global problem PP.
Ronald Miller
Reply to Denis Reagan
Your parents must be proud
Don Corey
Reply to Denis Reagan
And you actually believe the consumer carbon tax (which very few countries have) will magically reduce emissions and global warming?
Don Corey
Reply to Denis Reagan
Our federal government understands very little about "global problems", and obviously even less about the many problems and crises we have right here in Canada.
David Amos
Reply to Don Corey
Oh So True
"N.B. premier says removing maximum price regulations could spur competition, drive down prices"
LOL... and people said Higgs worked for Irving.
Tom
Reply to Jack Bell
They all work for Irving.
David Amos
Reply to Tom
Yup
John Pokiok
Gas stations can already sell gas for less than EUB rate is set only thing they can't do is sell it for more. I don't think abolishing these rules would be helpful. Most likely gas will get more expensive if you give them the free rein. And how can you have competition when we have only one rifenery everyone buys from it.
Jack Bell
Reply to John Pokiok
When did Holt start working for Irving?
Akimbo Alogo
Reply to Jack Bell
The hypocrisy is pretty thick here.
David Amos
Reply to John Pokiok
Good question
Rosco holt
The EUB is flawed. Just looking at electricity rates, residential customers aren't properly represented. On gas the refinery is most likely over represented like everything in NB.
Ronald Miller
Reply to Rosco holt
With his many years of valuable experience and superb leadership, Blaine Higgs would be an excellent choice as a member of the EUB.
Gilles Vienneau
Reply to Ronald Miller
Higgs is gone… forever. It is reality.
Geordan Mann
Reply to Ronald Miller
Is that you Blaine?
Steve Morningstar
Reply to Rosco holt
Wrong.. we have the third lowest electricity rates in the country (which is pretty good considering how much infrastructure we have and how low our population is)and much lower than NS or PE, Fuel was also generally lower than those two sister provinces.
Akimbo Alogo
Reply to Steve Morningstar
May be the third lowest rate, but the worst infrastructure and poorest maintenance. You get what you pay for i guess.
Steve Morningstar
Reply to Akimbo Alogo
When you have the population of Mississauga spread out in a province as big as NB, it is quite the undertaking just to keep things open and on without having massive price increases. I'm sure there are efficiencies that could be found but it isn't the doom and gloom that is perpetrated by this site. Even with the upcoming increase, which is a lot, we are still lower than NS and PE and you can bet they will also see an increase.
Rosco holt
Reply to Steve Morningstar
That is changing if the Empire gets it's way. Just last month, Irving went to the EUB to lower their rates stay competitive. Issue residential customers mostly haven't seen the same increases in their paychecks.
Akimbo Alogo
Reply to Steve Morningstar
"I'm sure there are efficiencies that could be found but..." - You think? Lets start with the bloated salaries from managerial up through executive level. Then we can go on to the obscene union employee salaries. Most of the linemen are moonlighting on the side as well. Rusting , rotting materials and equipment...losses due to theft caused by complete apathy (theres always money to buy more)...its absurd. Yeah, there might be ineffiencies. Lol.
David Amos
Reply to Rosco holt
"residential customers aren't properly represented"
I tried several times
Allan Marven
Sounds like an excellent idea. Start lobbying in Ottawa to brink an end to corporate welfare aka "supply management". Lets rememeber, we're all supposed to be in this together, through thick and thin.
David Amos
Reply to Allan Marven
Surely you jest
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