Soaring ethanol prices stinging New Brunswick drivers, even those who don't use it
CBC
Soaring prices in the United States for the plant-based fuel ethanol are hitting consumers at the gas pumps in New Brunswick, even at pumps that don't carry ethanol.
It's an expensive pricing oddity that has been causing confusion for provincial drivers, wholesalers and retailers, acknowledges the New Brunswick Energy and Utilities Board.
"We have had some calls," said David Young, the EUB's manager of regulatory affairs.
This week the maximum price for self-serve regular gasoline in New Brunswick as set by the EUB is 150.8 cents per litre.
That is 6.5 cents above the highest price that can be legally charged anywhere in Nova Scotia, including rural Cape Breton. It's a price difference that costs New Brunswick consumers about $150,000 per day.
Both New Brunswick and Nova Scotia regulate prices of petroleum products sold in their provinces and use similar weekly "New York Harbour" trading prices of individual fuel grades as the starting point.
But only New Brunswick has a mechanism to accommodate ethanol price spikes.
In mid-October, ethanol fuels, which in the U.S. are mostly distilled from corn and are normally cheaper than gasoline, surged in price and have steadily become the more expensive fuel.
Last week the average price of regular gasoline delivered in bulk to the New York Harbour was trading just below 79 cents per litre. However, regular gasoline blended with 10 per cent ethanol, known as E10 gasoline, was trading at a delivered price of 84 cents.
In setting its retail price ranges for this week, Nova Scotia used the lower amount, but New Brunswick regulations require the EUB to use the higher of the two, which for the last several weeks has been E10.
"Of late the ethanol price has been higher, so the board is setting (prices) on that," said Young
But ethanol pricing hasn't just widened price differences between New Brunswick and Nova Scotia. It has also collapsed price differences between regular and supreme grades inside New Brunswick.
Supreme trades at a higher price than regular gasoline on markets and usually sells to consumers for up to seven cents per litre more. But supreme contains no ethanol and so this week in New Brunswick the maximum allowable price difference between regular and supreme has shrunk to within one cent.
That has caused some double takes by consumers at gas pumps where prices for all grades are close to the same.
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