Manitoba

Price of gasoline in Churchill set to jump 30 per cent

The cost to fill up in Churchill will go up by as much as 50 cents a litre in the next day or so. Rail company Omnitrax informed local community leaders Wednesday they had exhausted supplies of less expensive fuel in their stoarge tanks at the northern town and would have to raise the price by 30 per cent.

Bump in price will take a litre of gasoline past $2

The cost to fill up in Churchill, Man., will go up by as much as 50 cents a litre in the next day or so — a 30 per cent jump. 

Rail company Omnitrax informed officials in the isolated community on Wednesday it had exhausted its supplies of less expensive fuel stored in the northern town, and would have to raise its price.

The cost of gasoline in Churchill is currently $1.70 per litre. 

Normally, fuel such as gasoline for vehicles and propane for heating would arrive in the Hudson Bay community by rail, but a flood in May washed out the tracks. Omnitrax, the federal government and the province have been trying ever since to decide whose should fix the line. 

An emergency delivery of 300,000 litres of gas arrived by ship in July — an effort that cost 30 per cent more than by rail — but Omnitrax said it would keep the price at the same rate until the inventory ran out. 

"We have reached that point today," the company said in a statement. "Unfortunately, we are unable to delay the cost increase any further."

Last July the company signaled it was raising the price of gasoline in the town, but later said it still had supplies in its tanks that had been delivered by rail.

Omnitrax cancelled another load of fuel destined for the community by ship earlier this month. The company and the Manitoba government were in a dispute over the safety of storage tanks Omnitrax owns in a facility next to the port.

Local airline Calm Air stepped in to avert that crisis by offering to pay for the shipment and store the fuel near the town. 

That load is expected to arrive this week. Calm Air has negotiated a price to off-load the shipment of fuel with Omnitrax and will store the gas in ten rail tankers stranded in the community by the flood.

Calm Air president Gary Bell says his company is paying a $67,500 charge from Omnitrax to unload the gas, a $850 per month rental for the tankers and a pilotage fee to get the ship into Churchill's port.

Propane to keep Churchill's homes and businesses heated through the winter was delivered earlier this month. (Ron Boileau/CBC )

Bell says the hope is to stabilize the cost of gas for the community through the late part of the winter. 

"We are not looking to profiteer from this; We are just looking to recover our costs," Bell told CBC News.

The provincial government said recently it would assist with Calm Air's efforts, but Bell says those details haven't been finalized yet.

Earlier this month a load of propane was delivered to Churchill by ship. The heating fuel was arranged by the provincial government to ensure the community has sufficient supplies to last the winter.

Mayor Mike Spence is talking with federal and provincial officials to see what options can be taken, according to a statement from the town to Churchill residents. 

Premier Brian Pallister told reporters Wednesday he sympathized with the residents of Churchill, but stuck to a now-standard response that the primary responsibility for the rail line and port was in the hands of the federal government.

Federal Transportation Minister Marc Garneau repeated Ottawa's demand that Omnitrax repair the tracks or face a lawsuit.

Provincial NDP opposition leader Wab Kinew fired shots at both levels of government saying their inaction was driving costs up and hurting Churchill residents.

"That adds up. And that is going to have a real impact on the people of Churchill. Which is too bad, because we've seen this slow train wreck unfolding. For months and months the provincial government and the federal government have known there is a crisis unfolding in Churchill and both sides have refused to act," Kinew told reporters.

ABOUT THE AUTHOR

Sean Kavanagh

Civic affairs - city hall reporter

Born and raised in Winnipeg, Sean has had a chance to live in some of Canada's other beautiful places (Whistler, B.C., and Lake of the Woods, Ont.) as well as in Europe and the United States. In more than 15 years of reporting, Sean has covered some of the seminal events in Manitoba, from floods to elections, including as the CBC's provincial affairs reporter.

now