Maria Canton
Northern News Services

Yellowknife (Jan 10/00) - The price at the pumps has jumped five cents.

It's only the second time the price of gas has gone up since 1996.

The latest hike is a direct result of the creation of Nunavut, said Roy Green, a comptroller for the Government of Nunavut Petroleum Products Division (PPD).

"We lost about 20 per cent of our volume when the territories split," he said.

"With the creation of the GN, annual sales volumes decreased from about 130 million litres to 110 million litres, meaning the PPD's operating costs increased."

That increase affects the retail cost of gasoline, jet fuel, diesel and home heating oil, all of which are funded through the petroleum products revolving fund.

The fund is mandated to break even, and a retail price stabilization fund is intended to protect consumers from annual fluctuations in costs. It also minimizes the need for frequent adjustments to retail prices.

"Any time retail prices increase, particularly in the North where fuel is a major source of energy, it won't impact positively," said Green.

Every October PPD reviews the retail prices of gas in order to allow all costs related to the summer fuel resupply to be factored into the year-end profit\loss forecast.

Based on the results of the review and changes of the operating components, a recommendation is submitted to a financial management board. This year the result is a five-cent increase. In 1996, it was a three-cent increase.

Grise Fiord's fuel contractor, Dennis Lambe, who raised the local gas price to 76 cents a litre from 71 cents a litre last week, said he is not surprised by the increase.

"I was expecting the price to go up in 1997 during our last re-supply shipment," said Lambe.

"I guess because PPD is non-profit they have to raise prices so they can break even."

Supervisor for Iqaluit's Baffin Gas Bar, Mike Hine, also said he has not heard too many complaints from the customers about the new price of 79.9 cents a litre.

"We haven't had an increase in three years and customers understand how the system works," said Hine.

"We've been hearing rumours since Nov. 1 that the price was going to go up, but it was delayed and delayed until last week."

An increase in world oil prices was also a contributing factor in the cost increase of refined petroleum products purchased by PPD.