PUB and province could do much more to combat rising gas prices, O'Keefe says

Dennis O'Keefe, founder of the Consumer Group for Fair Gas Prices, said the Public Utilities Board's latest report on fuel pricing should have done more to protect consumers. (CBC - image credit)
Dennis O'Keefe, founder of the Consumer Group for Fair Gas Prices, said the Public Utilities Board's latest report on fuel pricing should have done more to protect consumers. (CBC - image credit)
Dennis O'Keefe, founder of the Consumer Group for Fair Gas Prices, said the Public Utilities Board's latest report on fuel pricing should have done more to protect consumers.
Dennis O'Keefe, founder of the Consumer Group for Fair Gas Prices, said the Public Utilities Board's latest report on fuel pricing should have done more to protect consumers.

Dennis O'Keefe, founder of the Consumer Group for Fair Gas Prices, said the Public Utilities Board's latest review of fuel pricing should have done more to protect consumers. (CBC)

Dennis O'Keefe, the former mayor of St. John's and a longtime advocate for fair gas prices, says proposed fuel increases from Newfoundland and Labrador's fuel regulator were not made with consumers in mind.

O'Keefe, who founded the Consumer Group for Fair Gas Prices more than two decades ago, also thinks "onerous" taxes that have long been baked into pump prices need to be reviewed.

The Public Utilities Board last Thursday released a consultation document that lays out a number of suggested changes. In addition to likely hikes in gas and other fuels, the PUB suggested changing how prices work in geographic zones — likely meaning higher prices for rural areas, on account of the cost of transporting fuel.

"I can't really say that the focus to be fair to the consumer, as well as to the oil companies, is still there in the way it should be," O'Keefe said in an interview with the St. John's Morning Show.

"They're going to impose this increase based upon where people live in Newfoundland and Labrador. And that's certainly not protecting consumers."

Newfoundland and Labrador is divided into different pricing zones for fuels, which have different prices and markups depending on location as a result of the increased cost of fuel delivery.

The current markup on gas on the Avalon Peninsula is 25.93 cents per litre, and proposed changes would add 0.7 cents per litre.

But for the people living off Newfoundland's coast — in Fogo and St. Brendan's, for example — the increase would be more than five cents extra.

'Onerous' taxation needs to be reviewed: O'Keefe

O'Keefe said he'd like to see an advocate go through the PUB's recommendations to make sure the interests of consumers are accounted for.

He'd also like to see the use of the extraordinary price adjustment tool, which can allow for changes outside of the weekly adjustment schedule and has been used several times in recent years as markets have fluctuated, be put under the microscope.

New Brunswick drivers have been charged between 3 and 7 cents per litre on more than 1 billion litres of gasoline and diesel bought since last July to compensate oil companies for costs they may face from federal clean fuel rules.
New Brunswick drivers have been charged between 3 and 7 cents per litre on more than 1 billion litres of gasoline and diesel bought since last July to compensate oil companies for costs they may face from federal clean fuel rules.

Newfoundland and Labrador is divided into different fuel pricing zones, which have different markups because of the cost of transportation. (Sean Gallup/Getty Images)

"There's not a lot the PUB can do to control the price. All they can do is given all the conditions, oversee [and] have a mechanism that is fair to the oil companies and fair to the retailers and fair to consumers."

Where O'Keefe believes work can be done to benefit consumers, however, is in the taxation of the fuel.

The Newfoundland and Labrador government have taken measures to address taxation, like cutting seven cents per litre off the provincial gas tax, but O'Keefe thinks more could be done.

"If anything more positive can be done, it would have to be the province looking at what it can do… And the mechanism there would be to look at the onerous level of taxation that goes into a litre of gasoline," he said.

The PUB is asking for the public to weigh in on proposals before it submits its final report to government.

Requests for presentations run until July 15 and letters of comment should be filed by Aug. 16.

O'Keefe said he doesn't expect the process to bring much valuable information to the table, saying it doesn't seem fair to ask average members of the public to provide meaningful thoughts on such a technical document.

Download our free CBC News app to sign up for push alerts for CBC Newfoundland and Labrador. Click here to visit our landing page.