A three-day public hearing is set to begin Wednesday to look at retail margins for gas, diesel and heating oil in New Brunswick.
The Energy and Utilities Board asked Gardner Pinfold Consultants to review the maximum retail margins, delivery costs and full-service charges.
Their report, dated Dec. 2020, recommends increasing the retail margin for gas and diesel by 0.5 cents (7.6 per cent) to 7.3 cents per litre.
A review of 93 retail gas stations throughout the province found their operating costs increased by 7.6 per cent between 2017 and 2019.
The firm also suggested maintaining the maximum full-service charge at three cents per litre. Of the 15 per cent of retailers which offer a full-serve or split-serve enterprise, most set their price one to two cents below the maximum.
For furnace oil, Gardner Pinfold said the board should increase the retail margin by 2.6 cents (12.2 per cent) to 23.6 cents per litre.
The firm said furnace oil dealers continue to face challenging market conditions in the province due to declining demand and greater distance between customers in rural areas.
“Though it may be counterproductive from a competitive perspective to increase furnace oil prices, the risk of not allowing dealers the option of maintaining margins through a margin increase could be supply interruptions or loss of supply in areas of the province where delivery costs are highest,” said the report.
The application is unrelated to a previous request by Irving Oil to increase wholesale petroleum margins for furnace oil and motor fuels.
Irving Oil later withdrew its application, less than two weeks after the board denied the company’s request for an interim hike.
The hearing will take place virtually due to the COVID-19 pandemic.
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