On June 1, 2023, the Governor in Council of Nova Scotia enacted amendments to the Petroleum Products Pricing Regulations under the Petroleum Products Pricing Act, following recommendations from the Minister of Service Nova Scotia and Internal Services. These amendments aim to modernize definitions, establish new pricing methodologies, and implement adjustments related to environmental compliance costs.

Changes have been made to Section 3 of the regulations, introducing several key definitions. “CBOB” (Conventional Blendstock for Oxygenate Blending) now clarifies the components of gasoline. The term “Clean Fuel Adjustor” has been defined to refer to a monetary adjustment designed to mitigate the financial impact on wholesalers and retailers resulting from compliance with the Clean Fuel Regulations under the Canadian Environmental Protection Act. Additionally, “Spot Market” is now defined as a market where petroleum products are paid for and delivered immediately, complete with specific pricing information. Furthermore, updates have been made to the definitions of “benchmark price” and “gasoline” to align with current standards, including adjustments to specific numerical references in accordance with the latest Canadian General Standards Board standards.

The amendments also alter the mechanisms for determining reported product prices, particularly in Subsection 15B. The reporting source for gasoline pricing has transitioned from the Platts Report to Argus Media, with provisions allowing for a return to Platts or the Oil Price Information Service as needed. A new Section 15C has been introduced, establishing a methodology for calculating the reported product price for gasoline based on the volume-weighted average of daily spot market prices, set at 90% CBOB and 10% ethanol. For ultra-low-sulfur diesel, the reported product price will similarly be based on daily spot market prices from New York Harbour.

Section 16 outlines how the Board prescribes benchmark prices for various grades of gasoline and diesel. The benchmark price for Grade 1—Regular gasoline will now be determined as the average of daily high and low reported product prices since the last adjustment. The Board retains the authority to establish pricing criteria for Mid-grade and Premium gasoline and can adjust prices to reflect transportation differentials.

Additionally, a new Section 17A introduces the clean fuel adjustor mechanism. The Board is empowered to investigate methodologies for setting this adjustor, ensuring it accurately reflects the financial burdens associated with compliance to Clean Fuel Regulations. Stakeholders, including retailers and wholesalers, as well as the Minister, can prompt such investigations, which must be accompanied by public hearings before any decisions regarding methodology or adjustor amounts are made. The clean fuel adjustor will be expressed in Canadian cents per litre, promoting transparency in pricing.

Nova Scotia (95/2023) June 16, 2023