Order No. P.000628-4

IN THE MATTER of the Petroleum Products Act, R.S.P.E.I. 1988, Cap P-5.1

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IN THE MATTER of an application filed under Section 32 of the Petroleum Products Act, supra, by IRVING OIL LIMITED for decreases of 1.7 cents per litre in the prices of all products contained in its dealer and posted consumer tank truck pricing schedules based on decreased crude oil costs.

Wednesday, the 28th day of June, A.D., 2000

BEFORE

Wayne D. Cheverie, Q.C., Chair
Ginger Breedon, Vice-Chair
Elizabeth MacDonald, Commissioner

Decision and Order

On 16 June 2000, Ms. Claudette Maxwell, Pricing Representative for Irving Oil Limited ("Irving"), filed with the Commission under Section 32 of the Petroleum Products Act a duly-executed application dated 13 June 2000.  This application requested approval for a decrease of 1.7 cents per litre (cpl) in all product prices contained in its dealer and posted consumer tank truck pricing schedules, based on average crude oil costs for the two-month period of April/May, 2000. 

As requested in Order No. P.000515-0, on 28 June 2000 Mr. Kyle Logan outlined Irving’s position on a change from a bi-monthly to a monthly basis for crude oil price adjustments. 

For some time the Commission has been monitoring the existing timing for applications for crude oil adjustments.  This monitoring has provided the Commission with sufficient information to warrant a change at this time.  The Commission recognizes that volatility in the price of crude oil and unprecedented spiking in the prices of petroleum products have not declined, but, in fact, have increased.  Therefore, the Commission gives notice that until further notice, crude oil costs will be reviewed on a monthly basis.  An application or comment on crude cost changes and their relationship to the prices of refined product should be filed by the 15th of every month starting immediately (next filing would be 15 July). 

Applications submitted for the 15 July 2000 filing should be based on the average crude oil costs for the month of June.  This average would be compared with the current base period of April/May 2000 average crude oil costs.  Hence the 15 August application would be based on the July average crude oil costs in relation to the June average crude oil costs. 

In considering Irving’s crude oil adjustment application, the Commission reviewed similar applications of other wholesalers and its monitoring of the April/May 2000 average cost of Brent marker crude.  Following this consideration, the Commission determined that the crude oil cost component of pricing would require a reduction of 1.7 cpl in the price of refined products for all products contained in the dealer and posted consumer tank truck pricing schedules for Irving Oil Limited. 

Having made this determination, the Commission gave consideration to the issue raised by wholesalers regarding the very low level of markup margin presently available, and the continued and recently increased volatility of the crude oil and, more particularly, gasoline product markets.  The Commission in considering these issues and its overall legislative mandate to “…ensure at all times a just and reasonable price for heating fuel and motor fuel to consumers and licensees…” is of the opinion that a situation does exist in the marketplace today that requires a further adjustment in the price available in the dealer pricing schedule.  Therefore, as provided under Section 27 (a) of the Petroleum Products Act, the Commission will, on an interim basis, grant approval to maintain the price of all grades of gasoline contained in Irving’s current dealer pricing schedule at their current levels. 

The Commission therefore orders the following adjustments in prices effective 12:01 a.m. on 1 July 2000 in accordance with the attached Order.

THE COMMISSION HEREBY ORDERS AS FOLLOWS:

1. THAT the following wholesale tank truck prices are to be charged dealers in Prince Edward Island supplied by Irving Oil Limited, effective 12:01 a.m. on Saturday, 1 July 2000:

PRODUCT

 CENTS PER LITRE
(INCLUDING Federal Excise
and Provincial Taxes)
Regular Unleaded Gasoline

59.6
Mid-Grade Unleaded Gasoline 61.6
Premium Unleaded Gasoline 63.5
Low Sulphur Diesel 56.7

2. THAT the following wholesale posted consumer tank truck prices (which prices do not include Provincial tax or seven per cent G.S.T.) shall be in effect in the Province of Prince Edward Island for the wholesaler Irving Oil Limited, effective 12:01 a.m. on Saturday, 1 July 2000:

PRODUCT

 CENTS PER LITRE
(INCLUDING Federal
Excise Tax)
Regular Unleaded Gasoline

55.8
Mid-Grade Unleaded Gasoline 56.3
Premium Unleaded Gasoline 56.9
Diesel 46.6
Low Sulphur Diesel 47.6
Stove Oil 45.3
Furnace Oil 43.1

3. THAT the above dealer prices, with seven per cent G.S.T. added, and the above posted consumer prices, with Provincial Tax (where applicable) and seven per cent G.S.T. added, shall be indicated on all documents accompanying deliveries of these products.

4. THAT the prices quoted in this Order, with adjustments resulting from tax changes only, shall remain in effect until otherwise ordered by the Commission.

DATED at CHARLOTTETOWN this 28th day of JUNE, A.D., 2000.

BY THE COMMISSION:

Chair

Vice-Chair

Commissioner