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NUNAVUT - Fuel prices across Nunavut took a welcome tumble last month, as the territorial government bought much of its yearly fuel supply in advance to take advantage of low prices worldwide.

This is the first time the GN has bought fuel ahead of time, instead of buying just before loading the tanker ships.

David Evaloakjok fills up at Baffin Gas in Iqaluit. Fuel prices have dropped across Nunavut. - Gabriel Zarate/NNSL photophoto

"Historically, fuel prices are much more constant, but the past few years have been so volatile," said Shawn Maley, assistant deputy minister of Community Government Services. "The rules of engagement have really changed here."

Effective April 1, the price of gas at pumps across the territory dropped 10 cents per litre and the price of heating fuel took a similar drop. The price had stayed high for the past year because when the government bought its fuel for 2008-2009, the international price was high.

"The hunters here that I've talked to are quiet happy about it," said Qikiqtarjuaq's economic development officer Harry Alookie. "It's a relief for both sides, for the hunters and the homeowners. It's not very much but at least it helps."

In March the government of Nunavut bought about 25 million litres of diesel and 16 million litres of gasoline. The fuel is in a storage facility in Labrador awaiting the July sealift.

Between diesel and gasoline, Nunavut uses about 100 million litres of fuel each year, according to Maley.

Nunavut's Financial Management Board sets the price of fuel sold to local suppliers. The board lowered the price because of the cheap advance purchase and because low fuel prices are predicted for this summer, Maley said.

In the past, the government has avoided buying fuel in advance because of the cost of storage until the sealift season.

In addition to this early purchase, the government is considering buying "futures" of fuel. That means it would buy fuel at a set price before the supplier has the fuel to sell. The supplier then has to supply the fuel at the agreed date even if the price of fuel goes up.

Maley said the GN probably would not save much money in the price of fuel because suppliers are careful with selling futures right now. But because the GN would not have to pay for storage before sealift, buying futures could offer substantial savings.