N.B. consumers to pay refinery environmental costs at the fuel pump after all

A special levy charged to consumers at New Brunswick fuel pumps to help oil companies pay for tightening federal clean-fuel standards is scheduled to be cancelled by the New Brunswick government on Dec. 1, but that change promises to be temporary.

Natural Resources Minister John Herron said the regulation of petroleum prices in New Brunswick allows companies to recover all of their costs. He said this applies to the federal clean-fuel standards and will require a new charge to replace at least part of what is being cancelled.

"I am certain that there are costs of compliance to the clean fuel regulations," said Herron in an interview this week. "In a regulated marketplace the sector is entitled to recover the cost of operations."

The current levy, which is directly tied to the federal clean-fuel policy was established by the former government of Blaine Higgs to allow oil companies to pass the costs of complying with the federal standards through to consumers.

New Brunswick Liberals called that decision "wrong" and made a promise to end what is known as the "cost of carbon adjuster" charge during the 2024 provincial election.    

As a result, the adjuster, which this week is adding up to 7.9 cents per litre to gasoline prices and 8.8 cents to diesel (plus HST) is scheduled to terminate at the end of this month.  

However, there are offsetting plans to have the charge recalculated and renamed and then readded to pump prices that consumers could be paying for again quickly.

Herron said he is unsure how much a recalculated charge to consumers will be but expects consumers will eventually have to pay something toward the cost of tighter environmental standards on oil companies in a new levy after the current levy is terminated.

"I would agree with that," he said.

That is an about-face for New Brunswick Liberals.

As opposition leader, Susan Holt objected to any charge on fuel that would require consumers to pay for environmental costs imposed on oil companies.  In promising to eliminate the amount allowed in New Brunswick, she made no mention of replacing it with another amount.

"The Clean Fuel Regulations were designed to be borne by producers and refineries," Holt said in the legislature in October 2023.

"This government chose to make a special loophole to bypass that so that New Brunswickers would pay instead of the refineries. We think that is a poor decision, and New Brunswickers think that is a poor decision."

The current adjuster amount changes weekly based on a formula adopted by the New Brunswick Energy and Utilities Board and on gasoline over the last 28 months has ranged in price from as low as three cents per litre to as high as nine cents.