Government will take time reviewing heating oil prices: Telegraph-Journal, February 12, 2015
FREDERICTON • A price gap has opened up in home heating oil prices between New Brunswick and some of its Atlantic neighbours thanks to a regulatory change now under review by the Liberal government.
Oil prices may have fallen across Canada in recent weeks, but New Brunswickers who rely on furnace oil to heat their homes have not seen them fall as far as they have in provinces such as Prince Edward Island and Newfoundland and Labrador.
That’s because the previous Tory government changed the rules last August to help retailers whose margins were being squeezed between retail and wholesale prices for furnace oil.
Energy Minister Don Arseneault told the legislature on Wednesday he is monitoring the effect of the change on consumers, retailers and wholesalers and will take his time deciding whether the new pricing system is unfair and needs to be re-worked.
“I understand people are having a hard time,” Arseneault said.
“I am going to monitor it and if I feel in August 2015 – after analyzing each and every month – that the consumer is being treated unfairly, I will ask the Energy and Utilities Board to review the margins that were set.”
That answer does not satisfy Green party Leader David Coon, who raised the issue during question period in the legislature, stating that New Brunswickers who rely on oil furnaces are being “ripped off” by the new regulation.
“The Tories changed the way heating oil is priced, and now it is based on the cost of kerosene and diesel fuel rather than on the price of heating oil,” Coon said.
“It has made it far more expensive for New Brunswickers. Customers here are paying way more than people in other Atlantic provinces. It is a huge problem. Fundamentally they are being ripped off, and there is no reason the minister should be waiting until next August to reverse that regulation.”
During this week in February last year, the prices for heating oil, excluding taxes, were 117.8 per litre in Saint John; 111.9 in St. John’s and 119.3 in Charlottetown.
This week, the prices are 90.3 in Saint John; 73.4 in St. John’s and 81.5 in Charlottetown.
“The heating bill, in general, is lower now than what it was a year ago, and that is a good thing for consumers,” Arseneault said.
“The frustration comes with why other jurisdictions are paying less than New Brunswick, given that we have the refinery here in Saint John. In fact, we are consistently lower than Halifax, and lower than the Canadian average as well. There are price differences in Newfoundland and Labrador and P.E.I., but on the Island, 83 per cent of their homes are heated with oil, whereas in New Brunswick it’s only about 21 per cent. The density of the population of people heating with oil makes it more costly here than in P.E.I.”
Irving Oil, Ltd. did not respond to a request for comment on Wednesday.
Jason Parent, vice-president of MJ Ervin & Associates, a division of The Kent Group Ltd., said the company prepared a report for the previous Tory government on the heating oil situation.
“Retailers were getting squeezed,” he said.
“There was a cap on what they could charge at the retail level, but were being charged much higher than the benchmark price for their wholesale price.”
Coon said heating oil is used disproportionately for home heating by low-income families; seniors living in big, old family homes; and rural New Brunswickers who lack the capital to replace their heating system or even to insulate their homes to cut their costs.
“The government intends to dismantle the very agency, Efficiency NB, that could help families,” he told the House.
“The government has a bill before this House right now that will transfer staff from Efficiency NB to NB Power, whose customers heat electrically, not with oil. How does the minister intend to ensure that these vulnerable New Brunswickers can cut their oil heating costs?”
Arseneault said people who heat with oil have access to government assistance programs.
“From November to April, it is $145 per month, up to $870. I encourage people on low incomes to access those programs.”