The New Brunswick government is set to eliminate a special levy imposed on consumers at fuel pumps to assist oil companies in meeting stricter federal clean-fuel standards starting on Dec. 1. However, this cancellation is expected to be short-lived, with a new charge likely to replace part of the existing one.
According to Natural Resources Minister John Herron, the petroleum pricing regulation in New Brunswick enables companies to recover all their expenses, including those related to federal clean-fuel standards. Herron emphasized that in a regulated market, the industry is entitled to recoup operational costs.
The current levy, linked directly to federal clean-fuel policies, was introduced by the previous administration to enable oil companies to transfer compliance costs to consumers. New Brunswick Liberals criticized this move and pledged to end the “cost of carbon adjuster” charge during the 2024 provincial election.
As a result, the adjuster, currently adding up to 7.9 cents per liter to gasoline prices and 8.8 cents to diesel (plus HST), is slated to end this month. However, plans are in place to recalibrate and rename the charge, potentially leading to its prompt reintroduction into pump prices.
Herron expressed uncertainty about the recalculated consumer charge but anticipated that consumers would eventually have to contribute towards the stricter environmental standards on oil companies through a new levy after the current one is discontinued.
This shift marks a reversal for New Brunswick Liberals, with opposition leader Susan Holt previously opposing any fuel charge that would burden consumers with oil companies’ environmental expenses. Holt criticized the government for deviating from the original intent of the Clean Fuel Regulations, which aimed for producers and refineries to bear compliance costs.
The ongoing adjuster amount fluctuates weekly based on a formula determined by the New Brunswick Energy and Utilities Board and has varied from three to nine cents per liter over the past 28 months. Oil companies have not directly reported their costs related to federal policies to the EUB, which relies on a consultant’s model to estimate these expenses.
Concerns have been raised by petroleum retailers regarding the cancellation of the charge, fearing that elevated product costs from oil companies post-charge elimination could jeopardize their viability. Retailers are advocating for a replacement market adjuster of equal value to mitigate the impact of the expiring carbon adjuster on consumers.