March 2, 2009
SAINT JOHN (CNB) - A review by Department of Energy staff of the interruption formula contained in the Petroleum Products Pricing Act was released today, and its recommendation has been accepted by government.
Maximum retail gasoline and diesel prices are normally adjusted by regulation every Thursday. The analysis recommended lowering, under certain conditions, a threshold that causes price adjustments earlier than Thursday.
Maximum prices are set weekly according to benchmark prices in New York Harbour (NYH) for gasoline and diesel. Currently, if the daily NYH price changes by eight cents or more per litre, the New Brunswick Energy and Utilities Board will automatically adjust the maximum retail prices as of midnight of the following day. Effective March 30, this threshold will change to six cents, making the interruption formula more sensitive to abnormal daily NYH price changes in both directions.
Minister of Energy Jack Keir initiated the formula review last September after Hurricane Ike, which caused large and widespread fluctuations in gasoline prices.
"I am pleased to accept the recommendation outlined in the report, and view it as a win-win for both the retailer and consumer," said Keir. "Lowering the threshold will allow sellers to more quickly re-establish their margins in cases where there is a daily NYH increase of six cents or more, and also allows consumers to more quickly see lower pump prices re-established when there is a daily NYH decrease of six cents or more."
A copy of the review report may be downloaded from the Department of Energy website.
MEDIA CONTACT: Bonnie Doyle, Department of Energy, 506-658-2410.