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Question: 4 
Why are maximum price adjustments for regulated petroleum products suspended for winter and summer in some areas of Labrador?

The winter suspension of maximum price adjustments in Zones 11a and 14 was initially put in place based on historic practice to account for the difficulties encountered in supplying fuels during the winter freeze-up, which interrupts marine tanker supply to the regions. Weekly price adjustments in Zones 11a and 14 were suspended in the fall and then resumed upon confirmation of resupply in the spring. As a result of this suspension, maximum prices remained the same throughout the winter season in these zones, regardless of the changes in the actual market price and maximum prices in other zones.

Maximum prices in other Labrador zones continued to be adjusted on a weekly basis year-round until November 2020, following the Board’s Labrador Petroleum Products Pricing Review. Based on consultation and feedback from stakeholders, the Board determined the suspension of maximum price adjustments for the winter months should also be implemented for Zones 10, 11, 11b and 12, which are also primarily supplied by marine tanker and subject to infrequent supply.

In June 2021, based on stakeholder input during the Labrador Pricing Review, the Board implemented a suspension of maximum price adjustments for the summer months in Zones 10, 11, 11a, 11b, 12 and 14 until resupply in the fall. Suspending maximum price adjustments during periods when there is no or minimal resupply provides for cost recovery of costs of suppliers for purchased inventories and a better matching of maximum prices with actual costs. Further information on the Labrador Petroleum Products Pricing Review can be found here.

 

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