Imperial Oil said on Monday it is bringing down the cost of home heating fuel in Norman Wells. The new rate will still be higher than the one residents are used to.
People in the Sahtu town had described bills that were set to exceed $5,000 a month in some cases as prices spiked in recent weeks.
Imperial, which has a facility in Norman Wells, is the town’s sole fuel supplier.
The oil giant has said recent price increases were the result of having to bring fuel in by air after the summer barge season failed. Barge resupply is ordinarily much cheaper than air freight.
Norman Wells’ council declared a emergency earlier this month over the costs, asking the territorial and federal governments for more than $6 million to cover the expected additional expense.
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Town mayor Frank Pope joined Sahtu MLA Danny McNeely in campaigning for territorial or federal assistance, while the GNWT issued a $1.8-million support package for businesses and even donated to Norman Wells’ food bank.
On Monday, Imperial said it would halve the fee it had been building into its wholesale fuel price to recover air transportation costs. That will reduce the cost of home heating fuel from its recent peak, though it won’t fully eliminate the past month’s price increases.
Where previously Imperial had been incorporating a fee of $3.38 per litre for air transportation, that will now be set at $1.69, the company said.
The company has repeatedly declined interview requests about the issue. Monday’s announcement only became apparent when the NWT government sent a press release drawing attention to Imperial’s price change, which it had published on a Facebook page.
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“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” finance minister Caroline Wawzonek said in that press release.
“While this price reduction provides some relief, further steps are needed to fully address the economic challenges residents are experiencing,” Wawzonek continued.
“The GNWT will continue to engage with Imperial Oil, fuel and transportation contractors, and the Government of Canada to explore ways to stabilize prices further and minimize the impact on consumers.”
While home heating fuel was mentioned in Imperial’s statement, there was no mention by either Imperial or the GNWT of gasoline, the price of which has also spiked in Norman Wells. How gasoline prices will change, if at all, was not immediately clear.
“Imperial Oil’s immediate price reduction is a positive step, and I appreciate their willingness to help ease the financial burden on residents during this crisis,” McNeely was quoted as saying in the GNWT’s press release.
“This measure reflects progress, and I look forward to seeing how it benefits the community in the coming months.
“Norman Wells residents deserve a strong commitment from Imperial Oil that reflects the deep, lasting relationship the company has built with the community over more than 100 years of operation.”
Imperial asserted on Monday that the increased costs residents are paying exist purely to cover the extra cost of air freight, and do not include any “Imperial profit margin.”
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Costs to remain higher than normal for some time
The ultimate cost Norman Wells residents pay for home heating fuel won’t be identical to the air transportation fee shown above. That cost has fluctuated in recent weeks and might continue to do so as other factors are involved.
Imperial said the air surcharge it is incorporating in the wholesale price will remain – at the lower rate announced on Monday – “until the air transportation costs have been offset.”
The total of those costs so far was not given, and nor was a timeline for those costs to be offset, though Imperial said that timeframe would extend beyond the last air shipment – whenever that might come. (The winter road season early next year should offer some relief and a window to bring in enough fuel for the longer term.)
Monday’s announcement appeared to suggest that Imperial still expects to charge the same overall sum for air freight, but is spreading it over a longer period than was previously the case.
The Town of Norman Wells had previously criticized Imperial for not taking action earlier to stockpile fuel, given the likelihood of a disrupted or wiped-out barge season had been discussed for many months. Imperial has not addressed that concern.
The GNWT, too, has come in for criticism that it could have foreseen this crisis earlier, though ministers have insisted they did take action in Sahtu communities where the territorial government is responsible for fuel delivery. (Norman Wells is unusual, in the Sahtu, in relying on a private supplier.)
“Imperial has been working hard to maintain sufficient fuel supply in the Norman Wells region following the cancellation of barge season earlier this year,” the company stated on Monday.
“Our plan for this upcoming winter season includes bridging supply with air transportation until we can start shipments via winter ice roads. We are working closely with GNWT to maximize the winter road and are testing with additional trucking companies for further capacity to try to maximize the volume of fuel we can move over the winter road.
“We appreciate the patience and understanding of our customers and the community. Our priority remains on maintaining a reliable supply of fuel to support the local community.”
