YELLOWKNIFE - A Yellowknife resident was shocked last week after opening his heating oil bill to find his rate had shot up by 20 cents a litre from the previous month.

Craig Machtans couldn't believe his eyes when he opened his heating bill from Shell Canada this month. He discovered that he was being charged 20 cents a litre more for home heating fuel even though stock exchange prices for January were at a yearly low. - Mike W. Bryant/NNSL photo

Craig Machtans' latest heating bill from Shell Canada rang in at $448 for a fill-up on Jan. 3. His December bill was $292. It was then that he noticed that he was being charged 93 cents per litre instead of the 73 cents per litre he was paying the month before.

When Machtans called Shell to ask why his bill was so high, he said he was told that fuel prices are determined on a weekly basis by the company's office in Calgary, and there was nothing the local branch could do about it.

But Machtans said the company's explanation doesn't make much sense considering that international heating oil prices over the past 12-months were actually at their lowest just last month.

He pointed to the New York Stock Exchange's price index that shows heating oil prices at U.S. $1.55 per gallon in early January. The highest price over the past year was in August when heating oil prices reached $2.15 peper gallon, or about 67 cents a litre.

"The highest price I've ever seen was last year, and this is 10 cents a litre more than I've ever paid at any point last year," said the 10-year Yellowknife resident.

Machtans said the highest rate he had to pay through October to December was just a little more than 75 cents per litre.

Shell Canada spokesperson Jana Saunderson, said the price of heating oil in any given week has more to do with the cost of transporting it and what wholesalers charge than what's going on with the stock exchange.

"I think the thing customers have to keep in mind is that may be the price on the (New York Stock Exchange) but we're dealing with Western Canada," said Saunderson.

"The wholesale price rose significantly in January, and that price is affected by supply and demand, and also the cost of refining crude oil into products such as furnace fuel."

Even when world prices are low, they can jump if heating oil is in short supply regionally, she said.

Shell heating oil in Yellowknife was selling for almost 82 cents per litre last week.

Shell isn't the only fuel company in town handing out higher heating oil bills this month.

Petro-Canada was also charging 93 cents per litre for fill-ups the first week of January.

"Partway through December and into January there was a huge price spike," said a Petro-Canada employee, who declined to give her name.

"It's not just Shell picking on (Machtans), it's just the way it goes at refineries and we have to pass it on."

Machtans said Shell told him last week that he could take himself off automatic delivery and wait for lower prices before filling up his tank, but he scoffed at that suggestion, saying he didn't want to risk running out of fuel in the middle of winter.

"I'm not going to do that," said Machtans.