PEI

P.E.I. sees huge drop in heating oil, diesel prices

Following a large drop in the price of heating oil and diesel earlier this week Prince Edward Islanders got an even bigger break Friday morning.

MP says federal regulation needs to be considered

The cost of a heating oil tank fill up is down in the range of $250 this week. (Kevin Yarr/CBC)

Following a large drop in the price of heating oil and diesel earlier this week Prince Edward Islanders got an even bigger break Friday morning.

The minimum price at the pump for a litre of diesel is down 28.7 cents to $2.137. The heating oil maximum price dropped 26.2 cents to $1.652.

The minimum price at the pump for gas is also down, with 5.2 cents off the price of regular. It's now $2.056.

This was the regular weekly price review from the Island Regulatory and Appeals Commission.

Earlier this week prices for heating oil and diesel fell more than 15 cents, and the gas price went up on Tuesday.

The diesel price is 45.9 cents lower than it was to start the week, and 42 cents has fallen off the price of heating oil. That's the equivalent of $22.95 savings on a 50-litre fill up of diesel, and $252 on 600 litres to top up your heating oil tank.

Prices have been up and down, mostly up, since Russia's invasion of Ukraine at the end of February. They had already been at record highs.

But the last three weeks have been especially volatile, and in particular for diesel and heating oil. They both spiked by more than 40 cents at the end of April, but are now back below their April 22 prices.

While the war in Ukraine has played a part in high petroleum product prices, the pandemic has been an even bigger factor.

Lockdowns, and the resulting crash in demand, led to shuttering of refineries. A faster than expected recovery has left North America short of refining capacity, enabling those refineries that are operating to increase their profit margins.

Time for federal regulation?

Malpeque MP Heath MacDonald, in an open letter Thursday, accused the oil and gas industry of profiteering.

"It's time that we had a very serious and open discussion on how gas and oil prices are regulated," MacDonald told Island Morning.

There is too much talk about the role of taxes in the increase in prices, and not enough about the industry, he added.

"The innuendo and the misinformation that's out there, relative to gas price, I think is part of the issue," he said.

"Everybody needs to be clear on why this is happening."

World oil prices have gone up from about $90 a barrel before the start of the war to about $112, an increase of about 25 per cent. Meanwhile, rack prices for gasoline on the Island — that is, the price before taxes and wholesale and retail margins — are up more than 40 per cent.

Looking at the almost 50-cent increase in the price of gas since the end of February, about 40 cents comes from the rack price, with about 11 cents coming from taxes.

ABOUT THE AUTHOR

Kevin Yarr is the early morning web journalist at CBC P.E.I. Kevin has a specialty in data journalism, and how statistics relate to the changing lives of Islanders. He has a BSc and a BA from Dalhousie University, and studied journalism at Holland College in Charlottetown. You can reach him at kevin.yarr@cbc.ca.

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