I have a return to written question asked by Mr. Menicoche on February 19, 2013, to the Honourable Glen Abernethy, Minister of Public Works and Services, regarding community fuel prices.

1. The total cost of fuel delivery to NWT

communities served by the petroleum products division of Public Works and Services was $32,624,492 for fiscal year 2011-12.

2. The total cost of fuel delivery in Nahendeh

communities served by the petroleum products

division of Public Works and Services was $5,505,329 for fiscal year 2011-12.

3. The Department of Public Works and Services

does not offer fuel subsidies on the products that the petroleum products division provides to communities.

The petroleum products division program is a revolving fund and not funded through appropriations as are most other government programs. As a revolving fund, the petroleum products division is funded through the sale of petroleum products to consumers, and through those sales the petroleum products division purchases more fuel to resupply community inventories. The petroleum products division is established through legislation to operate on a cost-recovery basis.

If the petroleum products division were to sell fuel at a price below cost to select customers or community locations, PPD would be required to sell fuel at a price above cost to other customers and communities to maintain a financially balanced operation.

The cost components in the price of fuel are:

• the wholesale cost of fuel;

• the cost of transportation of that fuel to the

community;

• the commissions paid to the local community

fuel sales contractor;

• a levy charged by PPD for administration,

operation and maintenance; and

• federal and territorial taxes.

The Government of the Northwest Territories funds the cost of tank farm construction and the purchases of fuel delivery vehicles through the infrastructure acquisition planning process. These costs are not recovered in the price of fuel charged by the petroleum products division, and they represent a hidden subsidy of about eight cents per litre on all petroleum products sold by the PPD.

Additionally, the costs associated with the environmental remediation of tank farms are not recovered in the prices of fuel charged by the petroleum products division.

Government programs to assist residents with fuel costs do exist, and include those programs targeted at reducing home heating fuel costs for seniors and Income Assistance (IA), which provides financial support to low-income families. The Senior Home Heating Fuel Subsidy (SHHS) and IA are programs administered and funded through the Department of Education, Culture and Employment, The NWT Housing Corporation’s public housing programs provide income-based subsidies for the rental of housing for residents in need; this includes covering the costs for heating fuel. Funding assistance is

also provided by the Department of Tourism and Investment through the Community Harvester’s Assistance Program (CHAP). Thank you, Mr. Speaker.