Filling up your vehicle’s fuel tank or buying furnace oil for your home could soon cost you more.
Irving Oil wants the wholesale margins for motor fuels and furnace oil in the province to be increased by 4.1 cents per litre.
That would push the wholesale margin to 10.64 cents per litre for motor fuels and 9.63 cents per litre for furnace oil.
In its application to the New Brunswick Energy and Utilities Board, the company said there have been “substantial increases” in wholesale costs since margins were last reviewed in 2012 and 2013.
“The wholesale costs which have increased include terminal fees, transportation and port fees, working capital management, overhead and compliance costs,” said the company.
But it is unknown how much those costs have increased as the figures are redacted from Irving Oil’s application.
Irving Oil says the increases are needed urgently because of “numerous challenges” in the petroleum industry, compounded by the COVID-19 pandemic, which jeopardize supply continuity in New Brunswick.
“It is important for the actual wholesale costs to be recovered in the wholesale margins because without cost recovery it will not make economic sense to continue to supply retailers where the wholesale cost increases exceed what can be recovered from retailers,” the company wrote.
“As the costs need to be ultimately recovered, it is necessary to provide for a reasonable opportunity of cost recovery to maintain a reliable supply chain.”
In detailing some of the petroleum industry challenges, Irving Oil pointed to price regulation in Atlantic Canada, new regulations for environmental and other compliance obligations, and reduced demand for refined products.
The company noted that energy regulators in Nova Scotia and Newfoundland and Labrador recently approved interim wholesale margin increases ranging from 2.5 to five cents per litre.
The NBEUB has scheduled a pre-hearing conference on the matter for Jan. 25.
In the meantime, Irving Oil has requested an “immediate” interim increase of 3.5 cents per litre until the EUB makes a decision on its application.
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