Imperial Oil responds to questions over fuel price hike in Norman Wells, N.W.T.

Imperial Oil brought in more fuel into Norman Wells, N.W.T., on the winter road than usual last year, but it still wasn't enough to make up for the lack of barging into the community this summer.

Last week,  in response to criticism from local business owners, Norman Wells town council sent Imperial Oil a list of questions about why fuel prices had risen so drastically. 

The company responded to those questions in a letter the evening of Oct. 18, which the town shared with CBC News.

The company said last year, it brought about 30 per cent of its total fuel order via the winter road "because of our planning and potential risk of not having a barge season." 

It added the winter road is usually only used to top-up fuel, with the vast majority coming in by barge. Barging in fuel, it said, is the cheapest way to transport it.

In response to a suggestion from the town that the company should have moved more fuel on the winter road last year, Imperial Oil pointed to the fact there was uncertainty around whether barging would be possible until the territory's Marine Transportation Services formally cancelled shipments in May.

But Norman Wells Mayor Frank Pope called the argument "bullshit."

"We knew for sure last fall that there were going to be no barges last summer. We were prepared, [Imperial was] not," he told Trailbreaker host Hilary Bird in an interview Tuesday morning.

Infrastructure Minister Caroline Wawzonek also said the company could have planned better during a debate about the Norman Wells cost-of-living crisis in the N.W.T. legislature last week.

She said her department shared all information it had about potential barge cancellations with Imperial Oil throughout the resupply season last year.

In its letter, Imperial acknowledged as much, as it "had been having conversations with the GNWT about the potential of this outcome for weeks in advance of the cancellation notice." 

Wawzonek said based on the information the government shared with Imperial, the department decided to bring a year's worth of fuel by the winter road to the four Sahtu communities it supplies — and that in those communities, fuel prices have not risen at all since June.

Now, Imperial said it is currently working with the N.W.T. government to "maximize" the volume of fuel it can bring in through the winter road next year. 

The company also said it is exploring the possibility of working with more trucking companies to ensure staff or vehicle shortages with its current partners don't impact the operation.

Questions about airlift costs

Leaders had also asked Imperial Oil to provide a detailed breakdown of the transportation costs to fly fuel into Norman Wells, after some residents said recent increases to fuel prices seemed substantially higher than the market rate for airlifts.

In a Facebook post earlier this week, the company said the cost of flying fuel in is $3.38 per litre — a cost being added on top of the regular fuel cost.

In last week's letter, the company said Imperial Oil makes no profit from the price increase customers are paying for fuel being flown in, but didn't provide a breakdown of the prices they are paying their subcontractors.

"While we are not able to discuss the specifics of commercial agreements, there are a number of factors that went into the decision to partner with the third-party including safety, reliability and cost," the letter said.

The company did say the price increase reflects the cost of trucking fuel from Hay River or Enterprise to Yellowknife and then flying it to Norman Wells. 

The company said residents will only be charged the new higher prices on fuel that is shipped by air.

The letter also said there were 900,000 litres of diesel, the main fuel type used to heat homes in Norman Wells, remaining in the community when the company began flying in fuel earlier this month.

Imperial Oil said that amount of diesel would typically last until December, but it wanted to begin flying in additional fuel before the existing supply was depleted, "in case of weather disruptions."

The company also said its long-term goal is to minimize the amount of fuel flown into the community.

"It is our hope that once barges can run again, the costs will be more closely reflective of traditional pricing," the company stated.