Bill 15 - An Act Respecting Petroleum Products Pricing

BILL 15

An Act Respecting Petroleum Products Pricing

His Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

Petroleum Products Pricing Act

1( 1) Section 1 of the Petroleum Products Pricing Act, chapter P-8.05 of the Acts of New Brunswick, 2006, is amended by adding the following definitions in alphabetical order:

“cost of carbon adjustor” means the result of a monetary adjustment intended to mitigate for wholesalers and retailers the effect of costs incurred during a given compliance period by a primary supplier of liquid petroleum products to comply with the Clean Fuel Regulations (Canada) or any other regulatory instrument made under the Canadian Environmental Protection Act, 1999 (Canada) and the Environmental Violations Administrative Monetary Penalties Act (Canada). (majoration liée au coût du carbone)

“market adjustor” means the result of a monetary adjustment intended as a temporary economic remedy for a discrepancy between the maximum wholesale or retail price for a type of liquid petroleum product and the benchmark price the wholesaler or retailer, as the case may be, is required to pay for that type of product. (majoration liée au marché)

1( 2) Section 4 of the Act is amended

(a) in subsection (1)

( i) in paragraph (c) of the English version by striking out “and” at the end of the paragraph;

( ii) in paragraph (d) by striking out “Her Majesty” and the period at the end of the paragraph and substituting “His Majesty” and a comma, respectively;

( iii) by adding after paragraph (d) the following:

(e) the cost of carbon adjustor, and

(f) the market adjustor.

(b) in subsection (2)

( i) in paragraph (c) of the English version by striking out “and” at the end of the paragraph;

( ii) in paragraph (d) by striking out “Her Majesty” and the period at the end of the paragraph and substituting “His Majesty” and a comma, respectively;

( iii) by adding after paragraph (d) the following:

(e) the cost of carbon adjustor, and

(f) the market adjustor.

1( 3) Section 10 of the Act is amended

(a) by repealing subsection (1) and substituting the following:

10( 1) Subject to subsection (2.1), the Board shall establish the benchmark price for each type of heating fuel and motor fuel, using the criteria and procedure prescribed by regulation.

(b) by repealing subsection (2);

10( 2.1) On or after the commencement of this subsection, the benchmark price for premium grade gasoline shall be established by the Board using the weekly reference price for regular grade gasoline plus an amount per litre determined by the Board, using criteria and procedure as determined by the Board.

1( 4) Section 11 of the Act is repealed and the following is substituted:

11 The Board may adjust the benchmark price for each type of heating fuel and motor fuel at any time the Board considers appropriate, using criteria and procedure as determined by the Board.

1( 5) The Act is amended by adding after section 13.1 the following:

Adjustors

13.2 The Board shall set the cost of carbon adjustor and the market adjustor at any time the Board considers appropriate, using criteria and procedure as determined by the Board.

1( 6) Section 14 of the Act is amended

(a) in subsection (2) by striking out “ and may provide the Minister with its recommendations on the matter”;

(b) by adding after subsection (2) the following:

14( 2.1) The Board may, on the request of a wholesaler or retailer or on its own motion, conduct a review of the cost of carbon adjustor to ensure that it is justified in light of the application of the Clean Fuel Regulations (Canada) or any other regulatory instrument made under the Canadian Environmental Protection Act, 1999 (Canada) and the Environmental Violations Administrative Monetary Penalties Act (Canada) and may order that the cost of carbon adjustor be adjusted after the review is completed.

14( 2.2) The Board may, on the request of a wholesaler or retailer or on its own motion, conduct a review of the market adjustor to ensure that it is justified, having regard to current market conditions, and may order that the market adjustor be adjusted after the review is completed.

1( 7) Subsection 15(1) of the English version of the Act is amended by striking out “Her Majesty” and substituting “His Majesty”.

1( 8) Section 33 of the Act is amended

(a) in paragraph (b) by striking out “the Minister and the Board in establishing” and substituting “the Board in establishing”;

(b) by adding after paragraph (c) the following:

(c.1) respecting the information that may be considered by the Board in setting the cost of carbon adjustor and the market adjustor;

Regulation under the Petroleum Products Pricing Act

2( 1) Section 2 of New Brunswick Regulation 2006-41 under the Petroleum Products Pricing Act is amended

(a) by repealing the definition “Bloomberg”;

(b) by repealing the definition “weekly reference price” and substituting the following:

“weekly reference price”, with respect to conventional gasoline, E10 gasoline, ultra-low sulphur diesel fuel or furnace oil, means the average of its daily reference prices for the seven-day period excluding the weekend since the benchmark price of that petroleum product was last published. (prix de référence hebdomadaire)

(c) in the definition “Argus” by striking out “Argus US Ethanol” and substituting “Argus Americas Biofuels or any other report published by Argus Media that the Board considers relevant”;

(d) in paragraph (a) of the definition “base product” by striking out “Platts, Argus or Bloomberg, as the case may be” and substituting “a petroleum product price report selected by the Board”;

(e) by adding the following definitions in alphabetical order:

“OPIS” means a report published by the Oil Price Information Service company. (OPIS)

“petroleum product price report” means an Argus, Platts, OPIS or any other report the Board considers relevant. (rapport sur les prix de produits pétroliers)

2( 2) Section 3 of the Regulation is amended

(a) in subsection (1) by striking out “Thursday” and substituting “Friday”;

(b) by repealing subsection (2) and substituting the following:

3( 2) Subject to section 6, when Thursday is a holiday, the Board shall set the maximum wholesale and retail prices to take effect the following Saturday.

3( 3) Despite subsection (2), when Boxing Day falls on a Friday, the Board shall set the maximum wholesale and retail prices to take effect on Thursday, Christmas Day.

2( 3) Section 4 of the Regulation is amended

(a) in subsection (1)

( i) by repealing paragraph (b) and substituting the following:

(b) for mid-grade gasoline - one-half of the weekly reference price for regular grade gasoline plus one half of the weekly benchmark price for premium grade gasoline;

( ii) by repealing paragraph (c) and substituting the following:

( iii) by repealing paragraph (f) and substituting the following:

(f) for propane - the weekly average price, published daily, for the corresponding base product for any given seven-day period excluding the weekend.

(b) in subsection (3) by striking out “daily noon exchange rates” and substituting “daily average exchange rates”.

2( 4) The heading “Adjustment of benchmark price” preceding section 6 of the Regulation is repealed and the following is substituted:

Procedure following adjustment of benchmark price

2( 5) Section 6 of the Regulation is repealed and the following is substituted:

6( 1) The Board shall notify wholesalers of any adjustment to the benchmark price for each type of heating fuel or motor fuel pursuant to section 11 of the Act as soon as circumstances permit and shall set the maximum wholesale and retail price of each to take effect as of 12:01 a.m. of the day following notification.

6( 2) After making an adjustment referred to in subsection (1), the Board shall determine the benchmark price for that type of heating fuel or motor fuel in accordance with section 4 on the day it would normally be determined but may exclude the price data for the corresponding base product or base products for any day prior to the adjustment being made.

2( 6) Subsection 9(3) of the Regulation is amended by striking out “Thursday” and substituting “Friday”.

2( 7) Section 13.1 of the English version of the Regulation is amended by striking out “Her Majesty” and substituting “His Majesty”.

2( 8) The Regulation is amended by adding after section 13.1 the following:

Cost of carbon adjustor

13.2( 1) In setting the cost of carbon adjustor, the Board may consider any relevant information, including

(a) written submissions from primary suppliers, wholesalers, retailers and the Public Intervener for the Energy Sector regarding the financial and administrative burdens associated with the application of the Clean Fuel Regulations (Canada) or any other regulatory instrument made under the Canadian Environmental Protection Act, 1999 (Canada) and the Environmental Violations Administrative Monetary Penalties Act (Canada),

(b) conclusions drawn from reports from compliance credit markets under the Clean Fuel Regulations (Canada),

(d) wholesaler and retailer costs, including the purchase of liquid petroleum products at rack prices, and

(e) any other information the Board considers relevant in relation to the application of the Clean Fuel Regulations (Canada) or any other regulatory instrument made under the Canadian Environmental Protection Act, 1999 (Canada) and the Environmental Violations Administrative Monetary Penalties Act (Canada).

13.2( 2) The cost of carbon adjustor shall be expressed in Canadian cents per litre or other unit of measurement appropriate to the petroleum product.

Market adjustor

13.3( 1) In setting the market adjustor, the Board may consider any relevant information, including

(a) transportation costs, volume of sales, storage costs and inventory turnover rates for a type of petroleum product,

(b) applicable levies and insurance costs,

(d) the actual or expected duration of the market conditions that led to the price discrepancy,

(e) the impact the price discrepancy has on the maximum margin for a wholesaler and the maximum margin for a retailer, and

(f) any other information the Board considers relevant.

13.3( 2) The market adjustor shall be expressed in Canadian cents per litre or other unit of measurement appropriate to the petroleum product and may, given its temporary nature, be expressed as a positive, negative or zero amount.

2( 9) Schedule A of the Regulation is repealed and the attached Schedule A is substituted.

2( 10) Schedule A.1 of the Regulation is repealed and the attached Schedule A.1 is substituted.

SCHEDULE A

Petroleum Products		Base products
Regular grade gasoline	Conventional gasoline	Unleaded 87
	E10 gasoline	Ethanol	10%
		CBOB	90%
Propane		OPIS – Propane (Sarnia)

SCHEDULE A.1

Month	Motor fuel – ultra-low sulphur diesel			Heating fuel – furnace oil
	Base product % ULS Kero	Base product % ULSD	Base product % Chicago fob B100	Base product % ULS Kero	Base product % ULSD
January	83.3	14.7	2	77	23
February	80.4	17.6	2	75	25
March	63.7	34.3	2	54	46
April	0	98	2	0	100
May	0	98	2	0	100
June	0	98	2	0	100
July	0	98	2	0	100
August	0	98	2	0	100
September	22.5	75.5	2	23	77
October	58.8	39.2	2	62	38
November	78.4	19.6	2	76	24
December	83.3	14.7	2	77	23