TUKTOYAKTUK
When Merven Gruben of E. Gruben's Transport Petroleum said at the end of September that he was scrambling to get fuel into Tuktoyaktuk after a failed barge delivery, he only knew two things.

A gas pump in Tuktoyaktuk showing the current cost of gas in town at $2.25 per litre. Mervin Gruben of E. Gruben's Transport Petroleum Products Division said there is nothing he could do about the high price of fuel in Tuktoyaktuk after the Northern Transportation Company (NTCL) couldn't make it through with an expected load of fuel for the community. - photo courtesy of Mervin Gruben

"It's costing us a hell of a lot of money and it's the customer who's going to pay at the end of the day," Gruben told News/North at the time.

Last week, the extra cost of trucking fuel to Inuvik and then shipping it into Tuktoyaktuk showed up at the pump, where the price of a litre of gasoline reached $2.25 at the Tuk pump.

In comparison, the price of gasoline in communities served by the GNWT's Petroleum Products Division ranges from a low of $1.78 per litre in Deline to a high of $1.99 in Colville Lake.

Previous to this price increase, gasoline in Tuktoyaktuk was around $1.86 per litre.

The problem started when the Northern Transportation Company (NTCL) couldn't make a scheduled fuel-barge delivery thanks to exceedingly low water levels.

Gruben only received 600,000 of the seven million litres of gasoline and diesel he was expecting.

Gruben's petroleum has been providing bulk petroleum products to the community since 1999 when it took over petroleum supply from the territory.

Not all Northern communities rely on private petroleum providers. Most have fuel supplied to a local contractor through the GNWT's Petroleum Products Division, a branch of the Department of Public Works and Services.

This has led some residents of Tuktoyaktuk to wonder out loud if they would not have been better off under the old arrangement, when the territory provided fuel services.

Tuktoyaktuk-resident and former three-term mayor Ernest Pokiak remembers those times.

"When government had it, it was paying for itself," Pokiak said.

"They didn't do it to make money, they just did it to break even."

But Petroleum Products Division director John Vandenberg suspects residents of Tuktoyaktuk would be facing stiff fuel cost increases this winter even had his division still been the supplier for the town.

"There no doubt would have been an increase," Vandenberg said.

"This is a very aberrant year."

Vandenberg said that although the division operates on a break-even basis, that doesn't mean communities get their fuel subsidized.

"Through our program we have to sell fuel and recover all cost components of the fuel," Vandenberg said.

"Not only the wholesale cost, but the cost of rail (transport), trucking or barging. We have contractors in the communities who deserve and get a commission established through a competitive process."

"Insurance, taxes, everything is passed on to the consumer," he added.

"We can't discount a litre of fuel."

The petroleum products division was able to get fuel into all its communities this year, except for one Sahtu community.

"A small amount didn't get into Fort Good Hope, but the community will not be affected in any way," Vandenberg said.

He did say that the government-run program could insulate against unexpected fuel delays.

"We keep a certain amount of reserve fuel on hand (in the communities)," Vandenberg said.

"We try to offset transportation issues -- if we do have issues -- with sufficient inventory in the community to last for a while. In many cases, it could last a year."

But Vandenberg added that kind of fuel storage isn't necessarily feasible for a private operator.

"We're in a position to do that because we are the government, and there is a cost that goes with carrying a reserve of fuel."

Vandenberg's division also maintains a small cash buffer for emergencies where fuel may have to be flown into a community.

Back in Tuktoyaktuk, the community still doesn't have enough fuel to last the winter, but once the winter roads open, more will be trucked in.

"We now have enough product to get us by until late January when the ice roads are able to take heavy loads," Gruben stated in an e-mail.

"Then we will have to truck more in to last us until the summer when we hope we will get some shipments in before the water levels get too low once again, or from the West Coast."