NORTHWEST TERRITORIES
As fuel prices across Canada continue to fall, motorists in communities who buy their gas from privately owned gas stations are finally starting to see some relief at the pumps.

NWT motorists supplied by privately owned gas stations are seeing some relief at the pumps as national prices continue to fall, but communities the depend on the GNWT are not as fortunate. Here, George Drybones and his Brother Sam Drybones fill up jerry cans in Behchoko on Aug. 20 before heading out on a hunting trip. - NNSL file photo Gas prices per litre in the 16 communities supplied by GNWT as of Nov. 17 Lutsel K'e - $1.84 Whati - $1.72 Gameti - $1.85 Wekweeti - $1.99 Jean Marie River - $1.64 Nahanni Butte - $1.70 Wrigley - $1.68 Trout Lake - $1.74 Tulita - $1.87 Fort Good Hope - $1.83 Deline - $1.78 Colville Lake - $1.99 Tsiigehtchic - $1.89 Sachs Harbour - $1.90 Paulatuk - $1.95 Ulukhaktok - $1.90 Source: NWT Petroleum Products Division

However, consumers in the 16 communities that depend on the GNWT for their fuel are unlikely to see a dip in gas prices any time soon.

In recent weeks, gas prices in communities including Fort Providence, Fort Smith, Fort Simpson, Hay River and Yellowknife have dropped by as much as 11 cents while average national gas prices are down an average of 24 cents since peaking at $1.412 at the end of June.

"Everyone likes when the prices go down," said Curtis King, manager of the Hay River Esso.

King said the reason he lowered his prices several times in the last two weeks was because he was able to purchase fuel at a lower price from his supplier.

"I get it in once or twice a week," he said. "It's not a set date or time."

This is not the case for the 16 communities which get their fuel once a year through the government's petroleum products division (PPD). The PPD is responsible for purchasing, storing and distributing fuel to communities where private suppliers are unwilling to do so because they do not see an opportunity for profit. According to an e-mail from Department of Public Works and Services spokesperson Jhillian Adams, the government has contracts with suppliers which fix the cost for delivering the fuel while the price of gas and diesel are based on the wholesale rack rate in Edmonton on the day the government purchases it.

"During the year PPD sets prices to reflect the weighted average cost of all gasoline that it has in that community, which can include gasoline from previous resupply activities which may have been purchased at a higher or lower cost depending on the day of purchase," reads the e-mail.

Because gas is purchased in bulk and delivered once a year to each community, the price of gas at the pumps does not reflect the constantly fluctuating market rates. With the exception of a few communities, which have regular access via road, prices for fuel for in PPD-served communities change during freeze up and break up.

With gas prices starting to fall in the NWT, several MLAs have come forward to say the government needs to find a way to make gas more affordable for communities that rely on the government as a supplier.

"You have to feel for the small communities," said Nahendeh MLA Kevin Menicoche. "I keep telling the government (residents) are penalized because they're in small remote communities. We have to do something for them."

The government should consider providing subsidies to communities that are continuing to pay high prices despite the savings being witnessed across the territory, he added.

"We gave out $20 million to the power corp. why doesn't (the government) help the communities and reduce gas prices," he said.

"If you can (give) the power corp. $20 million, then you can give $5 million to the communities and drop (their fuels prices by) 10 cents."

Yellowknife Centre MLA Robert Hawkins agrees that the government should step in but said any help to the communities should be viewed in terms of economic stimulation rather than a subsidy.

"If people can't afford to do the thing they need to do, go get groceries, drive their kids to school, go to work, or be at work, what we're doing is continually making the Northwest Territories an ineffective region to live in.

"It being the most expensive time of the year, we need that stimulation there."

Municipal and Community Affairs Minister Tom Beaulieu was unable to provide a comment by press time.

John Vandenberg, director of the petroleum products division, was travelling last week and was also unavailable for comment.

During an Oct. 28 sitting of the legislative assembly, Beaulieu said there was no money available to subsidize fuel in small communities. He explained that the money to purchase gas for the 16 PPD-supplied communities comes out of a "revolving fund" which is intended to break even rather than generate revenue. As such the prices are intended to reflect the combined cost of the fuel and the cost to transportation, with a margin of five per cent either way.

"We are bringing it in at cost and the cost to distribute and that is it," Beaulieu said. "We can charge anywhere from 95 percent of what it costs us to 105 percent, but we try to be at 100 percent as much as possible."

Tsiigehtchic, which depends on the GNWT for fuel, saw prices drop by more than 20 cents since the end of October to $1.8 per litre, down from $2.01.

According to an e-mail from Beaulieu's office to Menicoche that the MLA shared with News/North, the PPD "is permitted to reduce prices for the highest cost communities, especially when those prices greatly differ from the prices in nearby communities."

"However, the nature of a self-funding program is that reduction of prices in one community will necessitate increasing the prices to other communities, so PPD keeps such adjustments to a minimum," states the e-mail.

"Prior to the adjustment for products in Tsiigehtchic, those prices were the highest of all NWT communities served by PPD, due primarily to high transportation costs."

Since the price in Tsiigehtchic was adjusted, Colville Lake and Wekweeti now pay the most for gas with prices currently sitting at $1.99 per litre.

In the short-term, Menicoche said the government should look at buying fuel in bulk while the prices are low so that those savings can be passed on to small communities in the future.

He also suggested the government consider restructuring the way the revolving fund operates.

"That revolving fund is actually legislated so we may have to review it and open it up," he said. "We're going to have to examine and look at it."

We welcome your opinions. Click here to e-mail a letter to the editor.