There’s been plenty of discussion as of late on a 5 cent mark-up on the cost of a litre of gas and why it’s still being applied, but the PUB explains it’s all about offsetting the increased cost to wholesalers of bringing refined product into Newfoundland and Labrador.

According to the Public Utilities Board, the five cent interim increase in wholesale mark-ups for gas, diesel, and furnace and stove oil was applied in October of 2020 to reflect the increased cost of bringing in supply after the shutdown of the North Atlantic refinery in Come By Chance.

With no refinery in the province, North Atlantic was forced to import refined products from New York and Europe.

In 2022 the board reviewed the mark-up, along with other pricing items, at the request of the provincial government.

The PUB found that any drop in the interim wholesale mark-up would not allow for the recovery of costs incurred through the import of fuel, including shipping and marine terminal costs.

At the time, wholesalers argued that the mark-up should be higher, but the PUB found that the information supplied was not enough to justify further increases.

The interim increases were considered as part of an overall Petroleum Products Pricing Review, and based on the information received, the fact that the refinery at Come By Chance is no longer refining conventional fuels, and that the mark-up allows for reasonable wholesale cost recovery, it was incorporated into the cost of fuel on a permanent basis.