OmniTRAX Rail says it made an "error" when it bumped gasoline prices up 30 per cent overnight in Churchill.
Residents woke up Thursday morning to a massive spike in the cost of fuelling their vehicles. The price at the pump had risen more than 60 cents a litre to $2.33.
The company rescinded the increase, which it blamed on a mistake in a variation between the cost of more expensive fuel arriving by ship this week and cheaper fuel shipped to the community by rail earlier in the year.
"The notification of the new price, which was determined based upon the current methodology of pricing new fuel received into inventory, was released automatically. This was an error, and we apologize for any confusion and frustration it may have caused the people of Churchill. The price increase has been reversed," an OmniTRAX spokesperson wrote in an email.
The company has pledged to rebate individual customers that paid the artificially high fuel price.
Until the 200,000-litre fuel inventory shipped by rail is used up, the company will continue to charge the historical price for gas. OmniTRAX says it "will be in conversation with EMO about how to mitigate future increases."
The fuel price hike mistake comes after the rail line to the community was closed following a severe flood that damaged the track in late-May. Food prices in the community have climbed dramatically despite federal and provincial subsidy programs that were extended to include the northern town.
The pricing error also happened in a week when OmniTRAX said the damaged rail tracks could potentially be repaired by winter, but said it wouldn't pay for the work, which it estimated at between $20 and $60 million.
Premier Brian Pallister told reporters Wednesday it was up to the federal government to take leadership on the port and rail situation.
Churchill Mayor Mike Spence was in Winnipeg for Omnitrax's technical briefing this week, but was unable to get a meeting with a representative of the Progressive Conservative government, despite repeated requests.
- Omnitrax says it can't pay up to $60 million to repair rail line to Churchill
- Pallister points at Ottawa for rail line fix
The pricing blunder also comes as Manitoba Senator Pat Bovey is on a fact-finding mission to the Hudson Bay community. She says Churchill is becoming increasing isolated because of delays in repairing the rail line and rising prices.
"You think about the cost of food. $13 for four litres of milk. I mean the costs are huge!" Bovey told CBC News by phone from Churchill.
Bovey says she supports repairing the tracks, but says she needs to gather more information before advocating how the work is done and by whom.
"I don't know what the other options are. We know it's three to fives times the cost to fly things up. We know the boats [cargo ships] are coming up from Montreal. That's hardly a direct route," Bovey said.
The recently appointed independent senator says there are huge changes on the cusp for the north, including climate change, natural resources and tourism opportunities.
"Somehow the gateway to the north is somehow being isolated," Bovey said.