[Fredericton, NB] The New Brunswick motor fuel industry is raising the alarm again as strong indications emerge that the provincial government intends to eliminate the cost of carbon adjustor, a move industry leaders say would devastate provincial motor fuel suppliers, threaten motor fuel supply and security, and ignore the province’s own regulatory findings.
“If this goes forward, motor fuel suppliers in the province will lose money on every litre pumped,” says Mike Hammoud, CICC Atlantic Vice President. “Undoubtedly, this will cripple the industry and jeopardize the consistent and secure availability of petroleum products across the province. How can the government expect any local business to operate at a loss?”
The cost of carbon adjustor was introduced by the Energy and Utilities Board (EUB) to offset the potential crushing impact of federal Clean Fuel Regulations that permit refiners and importers to recover the cost of compliance. Under New Brunswick’s regulated motor fuel pricing system, the EUB recognized that without the adjustor, the province could face fuel shortages, business closures, and widespread job losses across the sector.
Industry representatives say the adjustor was a measured, evidence-based solution developed by the independent regulator, not a political creation. New Brunswick is not unique as Nova Scotia and Newfoundland and Labrador, which have similar regulated pricing systems, implemented a similar cost of carbon adjustor component at the same time.
“The EUB implemented the cost of carbon adjustor for one reason, to prevent exactly an outcome that will cripple the province,” adds Hammoud.
Dire Consequences if the Adjustor Is Removed
According to motor fuel retailers:
- Both consumers and emergency services could lose access to reliable local fuel;
- Supply shortages could drive prices higher and undermine provincial motor fuel security.
- Both retailers and secondary wholesalers will have their regulated profit margins erased, resulting in losses on every litre of motor fuel sold;
- Many retailers will be forced to suspend sales of motor fuel simply because they cannot absorb the financial losses resulting from a cancellation of the adjustor with no substitute;
- Hundreds of jobs are at risk, particularly in small towns and rural areas;
“This government understands the complexities and the facts,” says Hammoud. “They have been presented many times, including Law Amendments Committee hearings on Bill 4, the legislation introduced and passed by the government to kill the adjustor.
“To even consider cancelling the carbon adjustor after hearing those warnings shows a shocking disregard for small business, rural communities, and the stability of the province’s motor fuel network.”
The industry is also calling out attempts to confuse the issue by linking the cost of carbon adjustor with a recent retail margin adjustment.
“Let’s be clear,” says Hammoud. “The retail margin adjustment has nothing to do with the cost of carbon adjustor. One deals with everyday operating costs. The other, the adjustor, exists solely to offset the federal Clean Fuel Regulations.”
The EUB is currently in the process of conducting a formal review of the cost of carbon adjustor. While it is underway, industry stakeholders say it would be unimaginable for the government to act before the process is complete.
“New Brunswickers deserve a fuel policy based on facts, not politics,” said Hammoud. “The EUB’s review should guide this decision, not political calculations. Pulling the plug before the review is completed would be a reckless mistake with long-term consequences.”
Media contact:
Mike Hammoud, Vice President – Atlantic
Convenience Industry Council of Canada
[email protected]
902.880.9733
