While fuel prices across the country are higher than ever, Nunavummiut are still paying some of the lowest prices in Canada – but that might not last long.
In Nunavut, the government buys fuel in bulk and stores it for year-round use. Fuel prices do not fluctuate with the market. Instead, prices are set based on what the government pays at the time of purchase. This means that right now, Nunavummiut are buying fuel purchased at last year’s price and not seeing the price increases elsewhere in the country.
The territory has already purchased about 71% of the fuel for next year’s resupply, but the remaining 29% still needs to be purchased.
David Joanasie, the minister for community and government services, said his department was watching the market to see when it was best to buy next.
“Global crude oil prices fluctuated significantly higher than in previous years,” Joanasie said. “So we have to be aware of what’s happening in the world and the impact on supply chains.”
He said he couldn’t say when the next purchase will be, but in a volatile market, he said forecasts suggest there will likely be another increase in fuel prices in the territory. However, Joanasie could not specify when.
“It all depends on when we buy and how much,” he said.
The territory already raised prices by eight cents a liter in February, in part to help balance the stabilization fund, which is supposed to adjust to market fluctuations and help stabilize retail fuel prices.
The federal carbon tax is also set to take effect on Friday, which will raise the prices of some petroleum products, including gasoline and diesel, by about one cent per liter, Joanasie added.
Ex-Finance Minister Says Cap Didn’t Increase 2 Years Ago ‘Unfortunate’
The territory’s former finance minister, Iqaluit-Tasiluk MPP George Hickes, says the territory should consider options that could allow it to take advantage of fuel prices when the market is favourable.
His argument stems from a plan he presented to the legislature two years ago that proposed to increase the territory’s fuel spending by $100 million.
Nunavut’s fuel purchase budget is capped at $250 million. Hickes said if that cap had been lifted when he suggested in the fall of 2020 — when prices were low — the territory might not have faced the current price increases.
“I just find it a shame that we didn’t have the opportunity to take advantage of the prices at that time. But again, the benefit of hindsight,” he said.
Hickes thinks the territory should always consider a plan to help it take advantage of fuel prices if or when prices drop.
“What we can do today is make sure that if the government is put in a position where it can leverage global markets in a positive way, we should give it the tools to do that,” he said. -he declares.
“I encourage all departments to look at ways to leverage buying power or, in the case of petroleum products, to be able to consider buying futures contracts when the market is appropriate to do such things.”