The Energy and Utilities Board will decide on Monday whether to cancel a public hearing into Irving Oil Ltd.'s request for a $20-million increase in gasoline, diesel, and heating oil prices and accept a confidential deal negotiated between the company and the public intervener instead.
Lawyers for Irving Oil Ltd. told the EUB on Wednesday they reached a deal on increases with Rene Basque, the government-hired public intervener, on Nov. 30 — five days before the province's first-ever public hearing into a petroleum price increase application was scheduled to begin.
But the regulatory board is not obligated to accept the deal if it's not in the public interest, Cyril Johnston, the EUB's vice-chairman, told Len Hoyt, an Irving Oil lawyer, and Basque.
The board reserved its ruling until Monday.
Details of the proposed settlement have not been made public, but a partially blacked out version indicates that increases of some kind, likely less than originally applied for by Irving, have been agreed to for all of the fuels.
The agreement is between Irving Oil, Basque and four other parties to the hearing, including: Wilson Fuels, XTR Energy, Co-Op Atlantic and the Magnetic Hill Esso station.
The deal will be made public if the EUB accepts it, but will remain confidential if rejected and a full hearing will commence, as originally scheduled.
Irving Oil contends the wholesale margins, currently six cents per litre for gasoline and diesel and five cents for heating oil, haven't budged since the adoption of petroleum price regulation in 2006 and have been heavily eroded by inflation.
The company applied for increases ranging between 22 per cent and 25 per cent in the wholesale margins it can charge retailers — and ultimately the public for gasoline — diesel and heating oil last June.
If successful, the company's original application would have boosted pump prices by about 1.5 cents per litre and raised about $20 million a year for Irving Oil and other petroleum wholesalers in New Brunswick.
Basque had been opposing several elements of the application, including the fact that about one quarter of the increase being applied for was to offset future inflation that even Irving acknowledged had not yet occurred.
He also suggested Irving Oil had wrongly tried to charge some refinery expenses it incurred because of new federal ethanol regulations to its wholesale costs, even though the provincial government previously adjusted retail prices to account for the addition of ethanol.
Irving Oil recently complained the company was going to have to pay the costs for Basque in the regulatory hearing. Basque said he expected to bill about $125,000 to oppose Irving Oil’s application.
Irving's lawyer told the board in November it was "an absurd and unduly onerous obligation" on the company to finance both its own case in favour of petroleum price increases and Basque's case against the application.