Q:
What products have maximum prices established under the Act?
A: The following
products have maximum prices:
Motor Fuels
Regular unleaded self-serve and full-serve
Mid grade unleaded self-serve and full-serve
Premium unleaded self-serve and full-serve
Low sulphur diesel self-serve and full-serve
Ultra-Low Sulphur diesel self serve and full serve
Heating Fuels
Home heating oil
Propane
Q:
What types of sales are covered by the Act?
A: Those sales
between a wholesaler
and a retailer and between a retailer and a consumer are covered by
the Act.
Q: What if I
think I have been overcharged?
A:
The Board is concerned about the possibility of a retailer charging more for
petroleum products than the maximum prices set by the Board.
As
there are a large number of retailers and they operate throughout the
province, the Board considers that the most effective way to ensure
compliance with the Act is to rely on the public to report possible
incidences of overcharging.
If
any member of the public believes a retailer has overcharged them they
should report this to the Board. The Board requests that complaints to the
Board include a copy of a receipt that shows clearly the following
information:
The date of the sale,
The type of fuel that was purchased,
The price per litre that was charged, and
The name and location of the retailer.
You
will also need to provide your name, address and telephone number.
The
Board will investigate all documented reports of possible overcharging.
Q:
How are the maximum prices established?
A:
STEP 1: Calculating the Benchmark Price: The benchmark
prices are based on the average prices in the international markets where
the product is sold in significant volumes. For motor fuels and heating oil
the benchmark is based on the average New York Harbour Cargo Price. In the
case of propane, the Sarnia, Ontario market price is used.
STEP 2:
Setting the wholesale price: To the benchmark price the wholesale margin is
added. The maximum wholesale margin is 6’ per litre for each type of motor
fuel, 5’ per litre for home heating oil and 25’ per litre for propane.
STEP 3:
Taxes are added: After the wholesale margin is added, the appropriate taxes
are applied. In the case of motor fuels, Federal Excise Tax, Provincial
Motor Fuels tax and HST are all applied. For heating fuels the HST is
added. This results in the Maximum Wholesale Price.
STEP 4: Setting the Retail Price: The retailer is
allowed to add 5 cents per litre to the wholesale price. In the case of
full-service gasoline, the retailer may also charge an additional 2.5 cents
per litre. The HST is then applied to the retail markup to get the
Maximum Retail Price.
STEP
5: Adding the Delivery Charge: The wholesaler may add a delivery charge to
cover the cost of delivering petroleum to various parts of the province. This
delivery charge is up to 2 cents per litre for motor fuels except in Grand Manan, where the delivery charge is 5 cents. The maximum delivery
charge for home heating oil is 5 cents and for propane it is 10 cents.
The
following table is a summary of the steps:
|
Step
1
|
|
Benchmark Price
|
|
Step
2
|
+
|
Wholesale
Margin
|
|
Step
3
|
+
|
Federal
Excise Tax
|
|
|
+
|
Provincial
Motor Fuel Tax
|
|
|
+
|
HST
|
|
|
|
=
|
Maximum
Wholesale Price
|
|
Step
4
|
+
|
Retail
Margin
|
|
|
+
|
Full
Service Charge
|
|
|
=
|
Maximum
Retail Price
|
|
Step
5
|
+
|
Delivery
Charge
|
|
|
=
|
Maximum
Total Price
|
Q:
Do wholesalers and/or retailers have to charge the maximum prices?
A: No. Companies
are free to charge less for any product. Their actual delivery costs may be
lower than the maximum amount permitted. In addition, a wholesaler or
retailer may simply decide to sell at lower prices. It is expected that
competition will result in retail prices often being less than the maximum.
The actual retail
prices for the products may vary up or down. This is acceptable market
behaviour
as long as the retail price does not exceed the maximum price allowed. If a
retailer exceeds the maximum total price allowed, this situation should be
reported to the Board.
Q:
How often will the maximum prices be set?
A: Normally,
maximum prices will be set every week. The new price will take effect
on Thursday mornings at 12:01 a.m. If there is a significant increase or decrease in
the benchmark price. Specifically, if the average market price for
motor fuel changes by 6 cents in one day, the maximum
wholesale and retail prices will be changed at 12:01 AM on the day following
the change in the market price. For home heating oil required
change is 5 cents in one day. For propane there must be a 6-cent
change in the average market price in one day to trigger the change.
Q:
How do I contact the Board with a question or Complaint?
Telephone:
Saint John area
658-2504
Toll free province-wide
1-866-766-2782
Fax:
1-506-643-7300
Email
[email protected]
