Premier Susan Holt has raised the possibility of eliminating regulation of retail gasoline prices in New Brunswick to reduce costs for consumers.

Holt raised the idea while responding to criticism from Opposition Leader Glen Savoie that eliminating the so-called “carbon cost adjustment” – saving consumers four cents per liter of ‘essence – could have unintended consequences.

In 2022, the valuer became part of the pricing formula used by the Energy and Utilities Commission to set the maximum gas price each week.

It requires the Agency to allow gasoline producers to pass the cost of federal clean fuel standards onto consumers through the Agency mechanism. This cost is 4.6 cents per liter this week.

Holt said last Thursday that the EUB may have other ways to force consumers to continue paying that cost and suggested it might be better to do away with the provincial pricing system altogether.

“It’s certainly a possibility. We want to see if this benefits New Brunswickers,” Holt said.

“And I think at this point, the prima facie data that we have does not suggest that this keeps prices lower, (or is) more beneficial to New Brunswickers than jurisdictions that have a price of the unregulated fuel, because competition drives that.”

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Holt said most gas retailers tend to set their prices at or near the weekly maximum set by the commission, and that eliminating the regulation would create a more competitive market.

“Removing regulation means retailers will start to compete for our business, which could lead to lower prices than what we see today,” she said.

But there’s no guarantee that will happen, and Holt acknowledged that completely removing price regulation would “potentially” allow producers to resume passing the cost of federal fuel standards onto consumers throughout the supply chain. ‘supply.

However, she said the more likely outcome would be that free market pressures would cause retailers to lower their prices.

Holt’s predecessor, Progressive Conservative Blaine Higgs, said in May that his government was considering repealing the price-fixing law, called the Petroleum Products Pricing Act.

At the time, Holt responded that the discussion should not take place “behind closed doors” and should involve the public.

“They should be able to see what’s being said, what’s being suggested, and they should be able to weigh in on alternatives or options,” she said in June.

The Holt government introduced legislation last week to repeal the carbon adjustment, which was passed by Higgs in 2022.

Savoie said in his official response to the Liberal Throne Speech that without the adjustment, producers will continue to pass costs along the supply chain – but this will now hit small local gas stations, putting margins at risk already thin beneficiaries.

“Retailers will not be able to cope with the pressure that will be caused by the changes that the government will put in place. They will not be able to adapt,” said Savoie, predicting the closure of certain stations- service. .

“It’s going to cause some of these retailers to remove that infrastructure and say ‘my business can’t handle the loss anymore’.”

Energy Minister René Legacy said last Wednesday that the repeal of the adjustment would come into effect as soon as the bill is passed, probably before Christmas, which should reduce the price by 4.5 cents per liter by the end of the year.

But Holt said the next day that the EUB had other mechanisms that could continue to pass the cost on to consumers, and that his government should see if it could prevent that from happening.

“There are a lot of things we can consider,” she said. “We don’t have all the information we would like from the EUB.”

When asked whether the government should have addressed this issue before introducing the bill, the prime minister responded that he was “referring (the issue) to the EUB, and we don’t know how they are going to act . t, and we don’t expect that to come back to consumers.

She agreed with Savoie that it was “absolutely” concerning that some gasoline retailers could go out of business without the adjuster.

“That’s why there is work to be done with the EUB and with others, to see how they will react to this and what choices they will make.”

The Petroleum Product Pricing Act was passed in 2006 and, while it does not lead to a drop in gas prices, it mitigates the dramatic pump price fluctuations that can occur during commodity market fluctuations. .

The EUB uses a formula, based on a market reference price, to set the maximum price once a week, taking effect every Thursday at midnight.

Green Party Leader David Coon said Holt’s bill repealing the carbon adjustment should have included language ensuring the EUB would not pass the costs of clean fuels onto retailers and leave them to producers.

“The EUB law can be amended by this legislature to give them the authority to do that. It’s the legislature. They are the government,” Coon said.