Gas prices expected to jump 13 cents Thursday, biggest increase in 9 years

Gasoline retailers in New Brunswick are preparing for a crush of customers Wednesday as motorists try to beat aThursdayincrease of 13 cents per litre or more,the largest single-day jump in pump prices in the provincein nine years.

"I would expect to see, with an increase to that magnitude, that we'll see some (gasoline) outages," said Jerry Scholten, a New Brunswick retailer whose family operates seven stations and is expecting a run on supplies.

TheThursdayrise is a delayed reaction to Hurricane Harvey, which caused turmoil in petroleum markets and rising street prices across much of eastern North America all last week.

But in New Brunswick the peculiarities of the province's gas price regulation system has temporarily held off the market effects from reaching consumers, a protection that will end dramatically Wednesday at midnight.

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It's a nightmare scenario for retailers and not just because of the rush of business it will likely trigger. Stations have been coping with surging post-hurricane prices from their suppliers, who are not subject to price controls.

Despite that, New Brunswick law, which resets what maximum prices petroleum can be sold for everyThursday, requires retailers to sell to consumers at pre-hurricane prices until then.

"We get killed," said Scholten. "One of the weaknesses of the regulation is that there is this foreshadowing that takes place.In cases like this, we get hammered."

Retailers hit by spike last week

According to the Kent Group, which monitors daily wholesale and retail petroleum prices across Canada, New Brunswick retailers saw wholesale prices of gasoline they pay jump 14 cents per litre last week as Harvey slammed Texas oil refineries and petroleum traders in New York bid prices up rapidly.

New Brunswick stations are not only prevented from passing those increases onto consumers untilThursday, but because motorists know the large increase is coming, most fill up well before then.

• Gas Prices in New Brunswick

Scholten said some stations may choose not to sell gasolineWednesday, or run out if volumes get too heavy, but he feels he has no choice but to serve everyone he can, even if he is losing money.

"The whole idea of our business is to be convenient and to have that regular customer coming in," he said. "And if I'm out of product, I can't satisfy their needs and they are going to go elsewhere."

Diesel prices are also likely to rise in New Brunswick on Thursdaybut were less affected by Harvey than gasoline and are expected to increase by five cents or less.

The last major one-day price increase on gasoline in New Brunswick was 12.8 cents on Sept. 13, 2008. That was triggered by another hurricane hitting Texas Ike but the increase lasted less than a week.