Clean fuel regulations now add 3.07 cents per litre to gas price

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Clean fuel regulations now add 3.07 cents per litre to the price of regular unleaded gas.

That’s down from 3.39 cents last week, a drop of just a third of a cent, after the New Brunswick Energy and Utilities Board decided to keep in place the formula that hikes gas prices in New Brunswick by passing on the cost of federal clean fuel regulations to consumers.

The board decided to make only minor tweaks to the formula after a highly anticipated review where the federal government, and even Blaine Higgs, questioned the added cost.

If you fill up a 50-litre tank today, the change amounts to a saving of 16 cents.

The Trudeau government has already criticized the decision by the utilities board in a statement, stating it amounts to “giving big, profitable polluters a free pass.”

The Higgs government has yet to weigh in.

The largely insignificant change comes after repeated complaints from the feds that the added cost is higher than needed and instead results in a cash windfall for refinery margins.

Premier Blaine Higgs has also questioned why the cost passed on to consumers was initially higher in New Brunswick than in neighbouring Atlantic provinces.

Meanwhile, opposition Liberal Leader Susan Holt has maintained that the formula should be scrapped entirely.

The federal government’s clean fuel regulations came into effect last July, requiring gasoline suppliers to gradually reduce the carbon intensity – or the amount of pollution – from the fuels they produce and sell for use in Canada.

But in New Brunswick, the Higgs government passed legislation that allowed the cost to be passed onto consumers, changing the price-setting formula for gasoline and other liquid fuels to include a “cost of carbon adjustor” in the province’s Energy and Utilities Board formula.

It’s another charge added to the price of gas, separate from the carbon tax.

The impact was initially much higher.

The adjuster was first set at 6.17 cents – with 0.93 cents extra added in HST for a total of 7.1 cents per litre – last summer.

But the cost has declined since as it’s based, in part, on the current price of carbon credits in California that have dropped over the last year.

The ruling handed down by the EUB states the existing formula doesn’t need changing until a carbon credit market in Canada is fully developed.

“The board determines that an interim cost of carbon adjuster mechanism continues to be appropriate pending further development of the Canadian carbon credit market,” reads the decision.

It commits to reviewing its “ongoing appropriateness” again later this year.

The ruling does make some small tweaks.

Part of the formula contemplates the cost to refiners of importing plant-based “renewable diesel” into New Brunswick to meet requirements.

The board states in its decision that it accepted evidence that renewable diesel has a lower carbon content than it had been inputting into its own formula.

The shift is what has marginally reduced the cost of compliance and in turn the cost passed on to consumers.