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Premier Susan Holt says she doesn’t have an explanation for why regulators, policy experts and others responsible for gas price regulation didn’t clue in to a simple way to lower prices for consumers until the end of 2025.
Holt acknowledged in a year-end interview with CBC News that the oversight meant New Brunswickers paid too much for gas in the last couple of years as a cheaper form of gasoline came into widespread use.
“I think a lot of people reacted that way and asked the same questions that I did: how did everyone miss this?” Holt said.
“We’ve been trying to figure out why it wasn’t caught sooner, but glad that we caught it at all.”
The Energy and Utilities Board stymied Holt’s first attempt to lower gas prices with a repeal of the cost-of-carbon adjuster, legislation that required the EUB to pass the cost of federal clean fuel regulations onto consumers in the pump price.
When the repeal took effect Dec. 1, the board replaced the charge — eight cents per litre at the time — with a new surcharge in the same amount, to protect gas stations from being forced to absorb the cost of the regulations.
According to the premier, a staffer in her office began poring over legislation and regulations looking for some other mechanism that would also lower the price.
N.B. premier says regulators and experts should have spotted mechanism to slash what consumers pay.
On Dec. 9, the staffer discovered that cabinet could issue a simple order-in-council to change which fuel type was being used by the EUB to calculate the minimum price.
The order, adopted two days later, substitutes E10 gasoline, which is cheaper because it is diluted with ethanol, into the formula.
The price of gas dropped 7.9 cents per litre.
The premier said she’d like to know why no one in the Department of Energy or at the EUB spotted that under the previous Progressive Conservative government or during the 13 months her Liberals have been in power.
“Those are the questions that we’re asking, to find out: is there a regular process to review, or did it just become habit, status quo?” she said.
“I’m pleased that we caught it when we did, but I wish that it had been caught by people before us.”
PC Opposition Leader Glen Savoie disputed the premier’s version of events.
He said he was told by an industry representative, whom he would not identify, that they had flagged the option to Holt months ago.
“They were told long ago that they could do this, and they still never did it,” Savoie said.
He accused the premier of wanting to score political points by repealing the PC surcharge.
“They were focused on the cost-of-carbon adjuster. They could have been focused on this.”
Holt said the change made sense because E10 became the dominant fuel for sale in New Brunswick over the last couple of years.
But that means consumers have been paying an artificially high price for E10 during that period.
Holt said it would be “very hard” for New Brunswickers to recover any amounts they should not have been paying because calculating the amounts — and who should reimburse consumers — would be complex.
But she said the EUB “is going to need to consider” the issue when it sets rates and profit margins for the industry in the future so the overcharge “comes out in the balance.”
The board does not appear to be able to do that.
“Currently, there is no mechanism to ‘balance out’ any differences between E10 prices and conventional gasoline prices,” executive director Dave Young said in an emailed statement.
