Why the Gas Prices are Skyrocketing in New Brunswick

It’s a Wednesday evening and you hear gas prices are changing again for the umpteenth week in a row, and you instinctively think to yourself “Anything to get Mr. Irving his money,” although, is it really the Irving’s to blame?

Gas prices are rising all over the world consistently. Canada, the U.S.A., Europe. It is increasingly hard to keep up with how much gas is on a weekly basis, seeing as how it never stays in one place, like a fidgeting child. The Energy and Utilities Board of New Brunswick gave me the process of how they set the gas prices. First they set a benchmark, which are the average gas prices based upon the international market. The benchmark for NB is the New York Harbour Barge price. Then they set a wholesale price, which is 6.51 cents added to the benchmark. Then comes the tax and charges set by the province and country, which are the Federal Excise Tax, Federal Fuel Charge, Provincial Motor Fuels tax and Harmonised Sales Tax (HST). Then comes the retailer, in this case I will use Circle K, because they use Irving gas. 6.5 cents can be added by the retailer, on top of three cents for self serve. Finally, the delivery charge set by Irving Oil, which is 3 cents/litre.

One disgruntled customer Shane Somers pondered the question “Why is it that the gas stations closest to the refinery cost the most, while gas stations in Moncton or even in Quispamsis cost less?” Well, the answer is simple, but also upsetting for the Saint Johners out there. When Irving delivers gas and diesel to cities or other provinces far away from the Irving Oil Refinery in Saint John, they charge a lower delivery price than they would for delivering within the Saint John area. This is because they want to give competitive prices to the other provinces, so other oil companies don’t come in to provide gas instead of Irving.

After visiting a local gas station that Irving supplies gas to, I decided to ask some customers what they thought of the gas prices. One uttered that it was “ridiculous,” while another older customer remembered when “gas was only 26 cents a litre when I was a kid.” 26 cents a litre, that would be a miracle nowadays. Instead, everyone in New Brunswick has to settle for a regular price hovering around $1.20/litre, getting as high as $1.29/litre two weeks ago. Although, the price of gas could very well get higher than that come the summer time, even during times of economic distress like now with the NB economy rebounding from the COVID-19 pandemic. Summer is a time when most people are on the roads for road trips, day drives in their convertibles, and the old fashioned drive to the beach with the family on those bright and sunny days, so the gas companies like to raise the prices then to maximize profits.

To answer my question, I would say it’s complicated. The price of gas gets decided by the international market, and takes primarily from the New York Harbour Barge to set a price, yet when the Irving Oil Company adds a higher delivery charge than normal, and after they had asked the provincial government to hike the prices in gas to line their pockets even more, one could say the Irving’s aren’t exactly helping the public and economy, during a pandemic no less.