In Nunavut, fuel prices aren't rising, but that could change

While fuel prices across the country are higher than ever, Nunavummiut are still paying among the lowest prices in Canada — but that might not be for long.

In Nunavut, the government buys fuel in bulk and stores it for use throughout the year. Fuel prices don't fluctuate with the market. Instead, prices are set according to what the government pays at the time of purchase. That means right now, Nunavummiut are buying fuel bought at last year's prices, and not seeing the price increases elsewhere in the country.

The territory has already bought about 71 per cent of the fuel for next year's resupply, but the remaining 29 per cent still needs to be bought.

David Joanasie, the minister of Community and Government Services, said his department is keeping an eye on the market to see when best to purchase next.

"Global crude oil prices have been fluctuating significantly higher than previous years," Joanasie said. "So, we need to be mindful of what's going on around the world and how supply chains have been impacted."

He said he can't specify when the next purchase will be, but in a volatile market, he said forecasts suggest there will likely be another increase to fuel prices in the territory. However, Joanasie couldn't specify when. 

"That's all dependent on when we buy and how much," he said.

The territory already bumped up prices in February by eight cents per litre, in part to help balance the stabilization fund, which is meant to accommodate fluctuations in the market and help stabilize retail fuel prices.

The federal carbon tax is also set to go into effect on Friday, which will increase prices for some fuel products, including gas and diesel, by about one cent per litre, Joanasie added.

The territory's former finance minister, Iqaluit-Tasiluk MLA George Hickes, argues that the territory should consider options that could allow it to take advantage of fuel prices when the market is favourable.

His argument stems from a plan he presented to the legislature two years ago that proposed to increase the territory's fuel spending by $100 million.

Nunavut's fuel purchasing budget is capped at $250 million. Hickes said had that cap been lifted when he suggested during the fall of 2020 — when prices were low — the territory might not have been faced with the current price increases.

"I just find it unfortunate that we didn't have the ability to take advantage of pricing at that time. But again, the benefit of hindsight," he said.

Hickes thinks the territory should still consider a plan to help it take advantage of fuel prices if or when prices do go down.