Nfld. & Labrador

Public Utilities Board will have to show its work when setting gas prices under new bill

As Newfoundland and Labrador residents deal with sky-high gas prices that seemingly change without warning, the provincial government says it's trying to make the process for setting those prices more transparent.

Government also initiating review of other legislation governing PUB

Digital Government and Service N.L. Minister Sarah Stoodley, seen here in a file photo, says the process for setting gas prices in Newfoundland and Labrador is a 'mystery bucket.' (Mark Quinn/CBC)

As Newfoundland and Labrador residents deal with sky-high gas prices that seemingly change without warning, the provincial government says it's trying to make the process for setting those prices more transparent.

Digital Government and Service N.L. Minister Sarah Stoodley says an amendment to the Petroleum Products Act aims to demystify how fuel prices are set in Newfoundland and Labrador.

"We completely understand how frustrating it is when fuel prices rise and fall. We understand how challenging it is not to be able to access a transparent breakdown of what makes up these prices," said Stoodley. 

"The day-to-day execution of these rules are overseen and implemented by the Public Utilities Board, and this is what we are trying to demystify with our proposed changes."

Gas prices in Newfoundland and Labrador hit a new record high on Tuesday after months of fluctuation, which the provincial government has primarily attributed to market forces and global factors like the Russian invasion of Ukraine.

As a quasi-judicial board, the PUB has the ability to set fuel prices without interference by government. Stoodley said the new legislation is meant to make that process more transparent, rather than give the government more say in how prices are set.

Under the proposed changes, Stoodley said, the PUB would have to present a clear breakdown of maximum retail and wholesale fuel prices, minimum and maximum markup, and price components like distribution, transportation and storage. 

"That's kind of a mystery bucket right now, you know, as far as I'm concerned," Stoodley said.

Revealing price changes early could cause supply issues: PUB

The PUB would have to show how those elements impact pricing, and hold public hearings about its price setting process.

The PUB has one scheduled price adjustment each week — on Thursdays — but also has the ability to make irregular price adjustments in response to market conditions. 

Gas prices in Newfoundland and Labrador hit a new record high on Tuesday. (Axel Tardieu/CBC/Radio-Canada)

The PUB shares an embargoed notice of those adjustments with fuel retailers — like gas stations — and media just hours before the change but doesn't make that information public until the adjustment has already taken place.

"The early release of the board's maximum pricing information can influence purchase behaviour in a manner that could lead to wholesale and/or retailer margin issues and therefore potential supply disruptions," said a PUB spokesperson in an emailed statement.

The spokesperson said the PUB does not do media interviews.

'Why is gasoline any different?'

Callista Burridge, a retired teacher living in Deer Lake, called foul on the PUB's practice of keeping price changes embargoed until the day of the change.

"We're all consumers of many, many products. And we have time frames in which sales are on or specials are on or discounts are on or coupons are on. We have deadlines to get in at this price at this time. So why is gasoline any different?" she asked. 

Burridge said she asked her regular gas station recently to confirm if prices were going up after hearing a rumour on social media, but an employee said they weren't allowed to release that information.

"Gasoline is something we need every few days, so why can't we have the information to plan our budgeting, to plan our fuel-ups?"

Dave Callahan, a gas station owner in St. George's, isn't happy about the process either but said if he releases embargoed information before midnight on the day of a scheduled price change he could face consequences.

"When that happens, we're told to not release the prices and we can't or we could lose our retail ability," he said.

Getting answers

Natural Resources Minister Andrew Parsons said he's written to the PUB to ask for a breakdown of how fuel prices are determined, but has received "nothing" in response.

"We're asking why, and again, we're not getting the answers we need. So we need to take these steps to get these answers for people," he said.

Energy Minister Andrew Parsons said he's asked the PUB how it sets gas prices and has received 'nothing' in response. (CBC)

The government also announced a review of other legislation governing the PUB, which falls under multiple departments. In addition to fuel products, the PUB also regulates electrical utilities, aspects of the motor vehicle industry, and more.

That review, which will include consultation with stakeholders like the consumer sdvocate as well as the PUB itself, is set to be completed this fall.

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