Oil home delivery rates going up in New Brunswick
Energy and Utilities Board approves interim 3.5 cent per litre-hike, but full hearing in December
Oil home delivery charges in New Brunswick are going up — at least temporarily.
The Energy and Utilities Board has approved an interim rate increase of 3.5 cents per litre, plus HST, which will take effect on Nov. 7.
It will add $19.78 to the consumer cost of a 500-litre delivery, HST included.
The increase won't be permanent until the EUB conducts a regularly scheduled full hearing on the issue in December.
But the board is satisfied an immediate increase is warranted, chairman Raymond Gorman announced on Friday.
At least 13 heating oil companies had pushed for the interim increase, arguing they couldn't wait until a decision from the December hearing.
They say they are struggling financially with fewer people using oil to heat their homes and had requested an increase of 4.42 cents per litre, plus HST.
Some companies told the EUB if they didn't get the retail markup approved immediately, they might not survive the current heating season.
"We cannot start another heating season without an increase in our margin," Peter Clark, of Woodstock-based Clark Oil stated in an affidavit to the board on Thursday.
"It will not make it viable to operate the business," said Clark, who has laid off five employees in the past seven years.
Wayne Smearer, of Smearer Fuels in Dalhousie, said in his affidavit: "Our costs have increased while our sales have steadily declined. We are working twice as hard for less and less."
The margins the companies are allowed to charge on deliveries has been frozen at 18 cents per litre for seven heating seasons, since the start of regulation in 2006.
In addition, they have been losing customers steadily every year. Demand for heating oil has decreased by about 30 per cent over the past seven years, figures show.
Public intervener René Basque opposes the increase, saying it will hit consumers hard.
The companies have said they will give consumers a rebate on the interim increase, if the EUB eventually rules against them following the December hearing.
The price of oil in New Brunswick has increased by about 30 per cent since 2006.
Heating a home with oil is currently about 20 per cent more expensive than heating with electricity, and about 30 per cent more expensive than natural gas.
Oil heat is about 50 per cent more expensive than heating with a pellet stove, and about double the price of heating with a wood stove.