No 'perfect solution' for heating costs, MLAs told

Last Updated: Friday, January 18, 2008 | 10:03 AM AT

CBC News

Forcing oil companies to reduce the minimum amount of heating oil they deliver won't change the overall cost to the consumer, P.E.I.'s standing committee on social development was told Thursday.

'The industry on the Island is operating with lower margins and therefore it does result in the industry having less flexibility.'— Mo Rodgerson, IRAC

The committee is looking at the high cost of heating oil, and one of the problems it's dealing with is the cost of a minimum delivery. The Salvation Army in Charlottetown has complained a minimum delivery costs $400, and even more in rural areas.

Mo Rodgerson said keeping prices low reduces the flexibility of companies.
(CBC)

But Mo Rodgerson, chair of the Island Regulatory and Appeals Commission that sets oil prices, told the committee the No. 1 complaint he gets is overall cost.

"I'm not sure that whether you're getting 200 litres or whether you're getting 400 litres it's going to necessarily change that overall impact in terms of the cost to the consumer," said Rodgerson.

Prices lower on P.E.I.

Rodgerson did note there is some good news for consumers. Islanders pay on average three to five cents less a litre for oil than consumers in Nova Scotia and New Brunswick. But he said what's good for the consumer isn't so good for the seller.

"It means that the industry on the Island is operating with lower margins and therefore it does result in the industry having less flexibility for special circumstances," he said, adding those special circumstances include such things as delivering smaller quantities of oil.

"It would be great if I were able to sit here today and offer you a perfect solution to this situation, but I don't have such a solution."

While Rogerson does not support legislated minimum deliveries, he said IRAC would have no choice but to enforce any new regulations.