8.8-cent surcharge on N.B. gas not going away yet

New Brunswickers appear destined to keep paying a provincial surcharge on gasoline for a while longer, despite a seven-month-old Liberal election promise to quickly eliminate it.

The cost-of-carbon adjustor is adding 8.8 cents to a litre of regular gasoline this week.

The Holt government committed to repealing the adjustor during last fall's provincial election campaign, but they hit the brakes after gas distributors and retailers warned it could put some of them out of business.

A committee of MLAs that held a day of hearings into the repeal legislation in February issued a report last week that didn't take a position on whether the adjustor should stay in place or be removed.

Instead, it tells the government to talk to the Energy Utilities Board about whether the current adjustor formula reflects the true cost of federal climate regulations.

Progressive Conservative Opposition Leader Glen Savoie said this virtually guarantees that the repeal bill won't pass before the legislature adjourns for the summer on June 6.

Minister wants to know impact of eliminating adjustor

Energy Minister René Legacy said the committee report was "smart and well-thought-out" and his office would contact the EUB this week to discuss the issue.

"We just want to make sure that before we make any changes, we know the impacts." 

The Higgs PC government introduced the adjustor legislation in 2022 so that the cost of federal Clean Fuel Regulations could be passed from producers through New Brunswick's regulated gas pricing system to consumers.

Critics denounced it as a way to protect Irving Oil from the regulations.

The cost per litre is set by the EUB every week. It is 8.8 cents per litre this week.

Legacy called that "quite high."

"There's something to be looked at," he said. "I think it came out in the committee that there is something to be fixed there."

The Holt Liberals promised in the 2024 election to repeal the surcharge "immediately," but after they introduced a bill to do that last fall, gas distributors and retailers fought back.

They told MLAs on the law amendments committee in February that without a law in place forcing the EUB to pass the cost to consumers, it would hit their bottom line instead.

Legacy said upcoming EUB hearings on what profit margins gas wholesales and retailers are allowed to make could also affect the decision.

He said the adjustor may have been helping retailers stay afloat at a time when the limits on their profit margins haven't kept up with costs. 

The minister wouldn't say whether the bill will advance and be adopted this spring.

"I'm not sure if it will go as-is, or if it will go with an amendment," he said. 

Opposition leader worried about retailers

Savoie said the government should abandon the repeal or risk seeing some gas retailers go out of business.

"Anything that causes gas operators to close in rural New Brunswick is a bad thing," he said.

"This government has obviously broken many of its promises. … I would hope that they do break this one, because this one, if they keep it, will cause gas stations in rural New Brunswick to close." 

When the bill was being debated last fall, Premier Susan Holt said another option would be to eliminate the provincial regulation of gas prices altogether.

Holt said Tuesday that possibility was "still a live conversation."