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Question: 10 In October of 2020, the Board approved interim increases of 5 cents per litre in the wholesale mark-up for gasoline motor fuel and 4 cents per litre for diesel motor fuel and furnace oil and stove oil heating fuel on the island to reflect the increased cost of supply due to the shutdown of the North Atlantic US Come by Chance refinery. These increases were made on an interim basis for all wholesalers on the island portion of the province, following the filing of an application by NARL Limited Marketing Partnership (“North Atlantic”) for a review of the wholesale mark-ups to reflect changes in the supply to the island caused by the transition of the North Atlantic Refinery into standby mode in March 2020. With no operating refinery in the province, North Atlantic was required to import refined products from New York Harbour and Europe. The Board’s order can be found here. As a part of its review the Board received detailed cost, volumetric and supply information from North Atlantic and also sought information from two other primary suppliers of petroleum products in the province, Imperial Oil Limited and Irving Oil, related to each supplier’s volumes and the impact of the transition of the refinery on their operations and costs. Based on the information provided the Board found that there were incremental costs associated with the changes in the method of supply on the island and that these costs were not reflected in the wholesale mark-ups. The Board determined that interim increases to the wholesale mark-ups were necessary to ensure the economic operation of multiple suppliers on the island and continued supply. The Board continues to monitor the circumstances related to the refinery and the supply on the island and will make changes with respect to the interim increases in the wholesale mark-ups if and when it is warranted in the circumstances. |
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