Prices at pump make big jump in Churchill

Hey there, time traveller!
This article was published 18/07/2018 (2105 days ago), so information in it may no longer be current.

OTTAWA — Gasoline prices in Churchill will remain at above $2 per litre, despite Ottawa extending the northern Manitoba town’s fuel subsidy Thursday.

That subsidy expired Wednesday, leaving bureaucrats scrambling as pump prices jumped to $2.54 per litre, up from $1.70 a day prior — an almost 50 per cent increase.

The price is expected to drop to $2.11/L, but not any lower.

Ottawa subsidized gas that arrived by boat in October through its Churchill Region Economic Development Fund. Officials say they had been working to extend the subsidy to a shipment of gas that arrived earlier this month, but hadn’t finished the paperwork by the time the original shipment ran out.

That meant the price shot up 84 cents Wednesday.

On Thursday, CRED officials said they’d soon extend the subsidy, which will bring down the gas price by 43 cents.

“Despite the large jump in price, it’s about on par with gas price increases elsewhere since November,” wrote Jason Denbow, executive director of Community Futures Manitoba, which manages CRED, late Wednesday evening.

David Daley, head of the town’s chamber of commerce, was livid when he saw the price jump. He claimed Denver-based Omnitrax — the company that controls the washed-out Hudson Bay Railway link to the community — wanted “to screw everyone in this town and gouge the poor residents of Churchill when we are at our lowest point.”

However, the company said it’s not making money off the higher fuel cost.

“The fuel price increase reflects the higher cost of transportation, and a number of factors that are outside of the company’s control, not any pricing or policy change by CMTF,” reads a statement from Omnitrax without a name affixed on behalf of its Churchill Marine Tank Farm, provided to the Free Press.

“We understand that this cost increase is an additional challenge for everyone in Churchill that comes at a difficult time. The CMTF is doing everything in its power to ensure the fuel delivery is as economical as possible. There is no increase of any kind to the CMTF’s operating margins.”

In a Thursday news release, the Town of Churchill thanked Ottawa for extending its subsidy, claiming the original price jump made Churchill “the community with the highest price for gasoline in North America.”

It’s not the first time a sudden spike in the cost of gas has rattled the remote, northern Manitoba town of 900.

A year ago, Omnitrax posted a price on July 20, 2017, that was 30 per cent higher than the previous day. By that afternoon, the company had apologized, saying it was a labelling issue because the town was still using fuel that had arrived by train, instead of the much costlier gas that arrived by sealift. Before that switch happened, officials had arranged a subsidy.

Daley said Wednesday’s price spike is the latest in a series of blows for the town, where residents are growing skeptical of the federal government’s May 30 pledge to restore rail service “before winter 2018.” That promise was linked to 10 months of still-ongoing talks aimed at transferring the railway and port to a local consortium.

The province has already proceeded with an autumn shipment of propane (used for heating), so residents can make it through the winter in case there is no railway fix before the November freeze-up; such shipments take months to arrange.

“We are all disappointed that this deal has not been finished yet; every day is a wasted day that there is no movement on repairs,” Daley wrote in a text message.

“The time is now for the federal government to actually get some balls, and take this rail line and port back and start repairs as soon as possible and sort it out in court.”

The previous shipment of gas had been held in tanks owned by Exchange Petroleum, a company under the same umbrella as Calm Air, whose chief executive officer, Gary Bell, said was upon request by the province and the Town of Churchill.

Bell said Thursday the company had not been asked to do the same for the gas from the sealift that arrived this month. Federal officials said that switching from Exchange to Omnitrax tanks did not impact the cost of gas.

Meanwhile, Calm Air said its July shipment of jet fuel passed chemical testing this week, after a first, inconclusive test meant the company had to rely on a diminishing amount of aviation fuel and instead over-fuel its planes when they left Winnipeg and Nunavut.

dylan.robertson@freepress.mb.ca