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Independent Oil Company Reduces Gas Shipments to P.E.I. To Protest Regulated Pricing

Posted on: Thursday, 1 September 2005, 15:00 CDT

HALIFAX (CP) - An independent oil company has reduced shipments of gasoline to Prince Edward Island, saying the province's regulated price for gasoline is too low.

The pump price for regular unleaded gasoline on the Island now ranges from $1.09 per litre to $1.11 per litre - far below the price charged on the mainland. Motorists in Nova Scotia, for example, were paying about $1.29 per litre on Thursday.

Wilsons Fuel Co., based in Dartmouth, N.S., says the 8.5 cent per litre increase authorized Thursday by the province's Regulatory and Appeals Commission won't cover the company's costs.

Wilson's decision to restrict shipments means as many as 30 of the Island's 150 gasoline retailers could run out of fuel by the weekend.

Spokesman Dave Collins said the company sustained losses of $10,000 a day in August because P.E.I.'s regulated market has kept fuel prices artificially low.

The latest spike in the wholesale price of crude oil means those losses could climb to $90,000 a day and Collins says that's unsustainable.

The commission issued a statement saying its latest price increase does not reflect the immense impact that hurricane Katrina has had on the U.S. fuel supply and crude oil prices.

"Local market resellers and wholesalers have advised the commission that . . . the commission's announced increase will still result in substantial losses at the retail level," the statement said.

"As a result of these unprecedented events, the commission will be reviewing product pricing on a daily basis and will institute prices changes on a more frequent basis. Consumers in Prince Edward Island should expect further price increases in the coming days."

Source: Canadian Press

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