The price of gasoline in Nova Scotia is likely to increase by about two cents a litre due to a change in how the Nova Scotia Utility and Review Board calculates the price.
In a notice released on Monday, the UARB is proposing a change in the reporting source it uses as the reference for the New York Harbor price of gasoline in its weekly setting of gasoline prices.
The board proposes to change its reporting source from Platts (Cargo) to Platts (Barge), which would be effective for the price setting of Friday, Feb. 15, according to the price regulator.
The UARB states that price-setting rules give the board the discretion to adopt a different pricing category within Platts.
If implemented, the change is “estimated to translate into an increase to the benchmark price of approximately two cents per litre, based on current prices.”
That increase caused by the change from Platts (Cargo) to Platts (Barge) does not account for any affect on the benchmark price that may occur due to normal market changes in the NYH spot price.
The board says it wants to change from Platts (Cargo) to Platts (Barge) because, in recent months, the Halifax Wholesale Rack Price for gasoline has increased in relation to the daily NYH spot price for gasoline, as reported in Platts (Cargo).
The increase in the price differential has been sustained or even increased over a number of months, which has eroded the wholesaler portion of the 6.65 cent per litre wholesale margin in the province under the price setting regime set out in the regulations.
“If this situation is not addressed, it may have potentially serious supply ramifications. This increases the risk of wholesalers not supplying low-volume retailers or rural stations at all. If wholesalers are not recovering most of their costs, they may stop their supply of gasoline altogether, or focus their business only on high-volume urban retail outlets,” the board stated in its public notice.
In order to help preserve availability of gasoline in rural areas, which is one of the stated objectives of the regulations, the UARB proposes making the change in its reporting source from Platts (Cargo) to Platts (Barge).
In conjunction with the change, the board stated it will continue to monitor the behaviour of the pricing information from the reporting sources and their relationship to rack price, and if required, will revisit the issue.
Anyone may make written comments on this matter by sending a letter to the clerk of the Nova Scotia Utility and Review Board, P.O. Box 1692, Unit "M", Halifax, N.S. B3J 3S3, or by email at: firstname.lastname@example.org or by fax at (902) 424-3919 by Monday, Feb. 11.
- Nova Scotia UARB website on gasoline pricing