Thank you very much, Mr. Speaker. I would like to ask the Minister of Public Works and Services questions related to my Member’s statement earlier about freight costs for the fuel hauled into the remote communities. How does the petroleum products division currently set its fuel rates in the remote communities? Thank you.
Thank you, Mr. Menicoche. The Minister of Public Works and Services, Mr. Abernethy.
Thank you, Mr. Speaker. The petroleum products division works on a cost-recovery calculation. We don’t actually make profit on the fuel; we intend to actually cover the total cost. The price is determined by the product cost when we purchase it in the South, transportation costs to get it to whichever the 16 communities we provide fuel in, a sales commission that’s provided to a local vendor who adds that. Those commissions are determined based on an RFP process where they submit their potential costs, some O and M expenses, some taxes and a little bit of evaporation loss. It’s a complete cost recovery, no profit to the Government of the Northwest Territories. Thank you, Mr. Speaker.
Can the Minister tell me how often these fuel prices are reviewed?
Mr. Speaker, we do fuel hauls into the different communities depending on their location. In the summertime we provide fuel by barge to some of the communities in the High Arctic. In some communities, we bring it in by ice road. Prices are reviewed every time we bring new fuel into the community.
Once again, it is a full cost-recovery program based on the cost of the fuel that we purchase and have provided to the communities. Mahsi.
What happens to the money that is collected when fuel prices go down after the rate is fixed in the communities served by the petroleum products division?
Thank you. I’m not sure I understand the question completely. The fuel in the tanks in the community was set on a fixed price in the community and we don’t bring more fuel in for most of these communities other than once a year. So there is no variation of price. The price in the tank is what we paid for it. Thank you.
Thank you, Mr. Abernethy. Final, short supplementary, Mr. Menicoche.
Thank you, Mr. Speaker. I’ll make it as brief as I can. Does the Minister agree to look at ways to make fuel prices more fair and reasonable in small communities, such as a freight subsidy or another form of subsidy? Thank you.
Thank you. Obviously we’re committed to try and get the lowest prices for fuel in the 16 communities that we provide fuel to and we’re always looking for ways to decrease the cost. As far as subsidy on transportation, I’m not sure that that would actually lower the cost, because the GNWT would still have that cost on them, but I’m interested to have a further conversation with the Member and possibly with committee to get their thoughts on this. But we’re always looking for ways to control the cost of fuel in our 16 communities. Thank you.
Thank you, Mr. Abernethy. Member for Range Lake, Mr. Dolynny.
