Residents of Labrador are seeing a huge increase in oil and gas prices and the unprecedented drop in world oil prices is to blame.

Oil and gas are delivered to Labrador in the fall before the winter freeze and are stored until the spring when new shipments come in.

Because oil and gas have seen unprecedented price drops in the interim, that’s resulted in substantial losses for companies like Woodward’s and Normore’s.

The two companies asked that the Public Utilities Board increase the maximum wholesale price to reflect the established price at the time the product was purchased in the fall.

That means the maximum price for gas and diesel has increased in Labrador by 30 cents a litre, and stove oil is going up by 20 cents a litre.

That’s below the amount requested by Woodward’s and Normore’s.

The board says the increases will allow for what it calls reasonable cost recovery for wholesalers and will help to ensure continued supply.

The maximum prices will remain in effect until the area can be resupplied in the spring.

The PUB’s full explanation can be read here.