Rejected: Irving Oil request for immediate petroleum price hikes denied by energy board

·3 min read
Irving Oil Ltd. had requested an immediate increase in wholesale margins ahead of an April hearing to mitigate financial pressures brought on by the pandemic.
Irving Oil Ltd. had requested an immediate increase in wholesale margins ahead of an April hearing to mitigate financial pressures brought on by the pandemic.

(Devaan Ingraham/Reuters - image credit)

In a firm rejection of Irving Oil's request for urgent increases in petroleum wholesale margins, New Brunswick's Energy and Utilities Board ruled Wednesday that the company will have to wait for a full hearing in April to argue its case.

"The board concludes the applicants have not met the principles to be applied for an interim order," said acting EUB chair Francois Beaulieu during a twenty minute reading of the board's decision.

"The motion is therefore denied."

In January, Irving Oil's marketing and commercial divisions applied for a 62.8 per cent (4.09 cent per litre) increase in the allowed wholesale margin for motor fuels, including diesel and gasoline and a 54.9 per cent (3.02 cent per litre) increase in the margin for furnace oil.

In addition, the company asked that prior to a full hearing on its request in April, 85 per cent of the increase on motor fuels (3.5 cents) and 99 per cent of the increase on furnace oil (3.0 cents) be granted immediately because of intense financial pressures it says have arisen in the industry during the COVID-19 pandemic..

A hearing on that request was held earlier this month and on Wednesday, after 12 days of deliberation, the board said no.

Graham Thompson/CBC
Graham Thompson/CBC

In the decision, Beaulieu said the two Irving Oil companies asking for the immediate increases needed to meet one of two requirements to qualify, but satisfied neither.

He said the company needed to offer evidence that waiting for a full hearing and decision on the main application would involve a "significant delay" or alternatively that waiting any length of time for increases would have a "deleterious impact" on the company and its ability to supply petroleum products.

Beaulieu said with a full hearing scheduled for late April, a decision is likely in May, which did not meet the definition of a significant delay. In addition, he said the company offered no solid evidence to show its financial circumstances are dire.

"The board has no conclusive evidence of any serious apprehended financial difficulties caused by the current duration of this proceeding on the applicants," said Beaulieu.

"The board concludes that the applicants have not established that the current wholesale margin for motor fuels and furnace oil are such that security of supply would be jeopardized during the period between its application and the likely timeframe of the board's final decision in this matter."

CBC
CBC

Irving Oil Ltd. did not immediately respond for comment on the decision.

Several community and union groups had intervened in the case to oppose the increases and appeared almost surprised they had won.

"I have a lot more faith in the process for sure," said Hafsah Mohammed with the Moncton climate action and social justice group Grassroots NB.

"I think this gives a lot of people hope that our society's checks and balances are in working order."

Abram Lutes, with the New Brunswick Common Front for Social Justice, also applauded the ruling.

"We're very pleased," said Lutes.

"It shows the board is taking public scrutiny of this process seriously."