Ouch! Nunavummiut to pay more for gas

MICHAELA RODRIGUE

IQALUIT — Nunavut residents woke up to an unexpected new year’s present on Jan. 1 — a hike in gas prices, courtesy of the government of Nunavut.

Nunavut’s financial management board recently approved a $0.05 per litre increase on all petroleum products in all Nunavut communities.

It’s the first price increase since November 1996, when fuel prices increased by $0.03 , said Susan Makpah, director of Nunavut’s petroleum products division.

The Nunavut government approves the retail prices of gasoline and other petroleum products in most communities. Prices vary from community to community.

In Iqaluit, the government sets the wholesale price to private retailers, while gas station operators charge their own mark-up to recover their operating costs.

Since Jan. 1, residents in all Nunavut communities have been forced to pay out an extra $0.05, per litre, plus GST, when they went to the pumps, or purchased naphtha and other petroleum products.

In Iqaluit, private operators added more than $0.05, plus GST, to maintain their rates of profit. A litre of unleaded gas now costs $0.79 in Iqaluit. Prior to Jan. 1, it cost about $0.73.

The hike was approved due to rising crude oil prices on the world market, said Roy Green, controller of the division.

Crude oil prices on the world market prices went up by $0.08 to $0.10 a litre during the last year, Green said. The creation of Nunavut also affected the petroleum division’s operating costs when some economies of scale were lost.

“We felt at a minimum that a five-cent increase was required for us to stay within our mandate,” Green said, adding that the petroleum division has to cover all of its operating costs from retail sales.

The division has tried to cut some of its operating costs, along with hiking retail prices, to cover the increased cost of gas.

Nunavut buys about 110 million litres of petroleum products once a year through the Northern Transportation Corporation Ltd. (NTCL), Green said.

The government then resells oil products such as gasoline, diesel and naphtha in most communities. NTCL ships the oil to Nunavut comes up between July and October on the sea lift.

The Northwest Territories Power Corp. buys some of its oil from the government. An NTPC spokesperson said this week that Nunavut power rates won’t be affected in the short ter,

Word of the price hike didn’t become public until Dec. 20, when the government notified hamlet offices, government departments, and contractors who deliver gas. They also posted notices where gas is sold.

The petroleum division is now studying what may happen to world oil prices in the long term, and how it should react to those changes, Green said.

“We are doing an evaluation for the next three years to get some general idea of what direction the prices may be headed in. We will be doing a detailed analysis over the next six months,” Green said. The government won’t know whether the $0.05 hike goes far enough until that study is completed.

The increase in gas and naphtha prices could hit some Nunavut hunters, said Pitseolak Alainga, chair of Iqaluit’s Amarok Hunters and Trappers Association.

“That would probably have impact on unemployed hunters. But for the hunters that have jobs it would not be much of an impact,”Alainga said after hearing the news.

Alainga said he will meet with the association’s board to discuss the increased price.