'No true benefit' to regulating gas prices, Liberal minister says

The Holt government's natural resources minister has come out strongly in favour of completely eliminating gasoline price-setting rules — while defending his own role in establishing the formula for the controversial carbon-cost adjustor Liberals plan to eliminate.

John Herron has no official responsibility for gasoline regulations, but Premier Susan Holt said he's playing a key role in discussions thanks to his former job as a member of the Energy and Utilities Board.

At the EUB, Herron was part of the panel that decided how to calculate the carbon adjustor, which adds 4.6 cents to the price of a litre of gasoline this week.

It's a cost that Holt promised to eliminate as part of a package of campaign commitments to make life more affordable for New Brunswickers.

But it looks increasingly likely that the Liberals will get rid of the EUB price-setting system altogether.

"There is no true benefit in my perspective of having a regulated regime in New Brunswick but there is a cost," Herron told CBC News in an interview.

"We don't benefit from the opportunity for the market to compete down profit margins and compete down costs." 

Eliminating the price-setting mechanism completely would allow gas producers and distributors to reintroduce the carbon cost back into the supply chain and pass it down to customers.

"It's a cost of doing business in Canada, and that cost has to be included in the price," said Carol Montreuil, the vice-president for Eastern Canada with the Canadian Fuels Association, an industry group.

"One way or another, in all provinces in the country, that cost — coming from the federal policy on clean fuel standards — is being applied across the country. New Brunswick is no different."

Holt argued last week that eliminating price regulation will create more competition among gas retailers, potentially driving prices down. Herron said he agrees with that position.

"If we were in a non-regulated market, not only do you have a chance to compete down margins, you're actually able to compete down costs, including that of the adjustor," Herron said during Question Period on Wednesday.

But Montreuil said there's no way competition will push prices down far enough to completely eliminate the carbon cost.

"No, not that full amount, because that number is real. It exists elsewhere in the country," he said.