Oil companies in N.B. being overcompensated for federal clean fuel costs, experts say

New Brunswick has been overestimating the cost of federal clean fuel regulations on oil companies and have allowed consumers to be overcharged by millions of dollars since last July as a result, two expert witnesses told an Energy and Utilities Board hearing this week.

Timothy Auger of the group Advanced BioFuels Canada and Vijay Muralidharan of Calgary-based R Cube Economic Consulting Inc. are each challenging a formula adopted last year by the EUB to calculate the cost of federal clean fuel rules on oil companies.

This week, that formula is allowing oil companies to add 5.22 cents per litre to the price of gasoline and 5.82 cents to the price of diesel in New Brunswick to pay for the cost of regulations that took effect nationally in July.

Every one cent added to petroleum prices in New Brunswick costs consumers about $1 million per month at the pumps.