The PUB is responding to criticism surrounding its price-setting formula. Gas price analyst Dan McTeague has been highly critical of the PUB for lagging behind the rest of the country in making its price-setting adjustments.
The PUB says in accordance with the Petroleum Products Act, benchmark prices are calculated using the average of the daily high and low as published by Platts US MarketScan for each day since the last adjusted maximum price.
A report is received by the Board each morning outlining the previous day’s market data. For regular weekly adjustments, the last Platts US MarketScan daily report used for the average benchmark price calculation on Thursday, is received on Wednesday reflecting the average of the daily data up to the previous Tuesday. As a result, says the PUB, there can at times be a difference between the most recent daily prices and maximum prices, especially when markets are volatile.
In the case of extraordinary adjustments, maximum prices may not be based on seven days of data. The PUB says in general the price setting process in this province is similar to the price setting process in other Atlantic provinces – however, unlike the other Atlantic provinces, prices in unregulated jurisdictions change more frequently and are determined by individual companies.
In the meantime, the Board is currently finalizing the schedule and process for a review of the price-setting system, which will include opportunities for consumer and industry participation and input. Details on that process are expected early this fall.
