Soaring prices hit Nunavut fuel stabilization fund
Last Updated: Monday, November 19, 2007 | 10:08 AM ET
CBC News
Despite raising prices at the pumps earlier this month, the Nunavut government estimates that the rising cost of fuel will require it to bolster the fund it uses to stabilize fuel prices in the territory.
Officials with the government's petroleum products division say they will ask the legislative assembly for cash to cover losses to its Petroleum Products Stabilization Fund, which helps protect Nunavut consumers from constantly changing fuel prices.
"We're going to be requesting an estimate [of] $7 million," Susan Mukpah, director of the division, told CBC News.
The Nunavut government, which heavily subsidizes fuel costs in the territory, raised fuel prices on Nov. 1 in an attempt to soften a projected deficit, blamed in part on rising oil prices. The retail cost of gasoline went up by 10 cents per litre, while aviation fuel rose by 20 cents.
Despite those price hikes, Mukpah said the government will still surpass the stabilization fund's legislated limit — at plus or minus $5 million — by $7 million.
Mukpah said MLAs will be asked for the extra funding at the legislative assembly's next sitting in February.
The territorial government decided not to increase the cost of diesel products, which are used mainly to heat homes and businesses.
"Next year, depending on what the world oil prices are and the other factors that are outside our control, then we have to evaluate that at that time," Energy Minister Ed Picco said.
"But the government has the luxury of doing this — providing a check and balance to those prices — and we continue to do that by providing subsidies to homeowners and consumers."
