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The new reality in Nunavik is $1.47 a litre

"There has never been such a small difference between the gas prices in Nunavik and Montreal"

JANE GEORGE

Since last week, people in Nunavik have been paying more to tank up their ATVs, vehicles and boats - 30 cents a litre more than last year.

On Sept. 1, the day new gas prices are traditionally announced in Nunavik, the price per litre of premium gas rose from $1.17 to $1.47 in three communities, Kuujjuaq, Quaqtaq, and Kangiqsualujjuaq, which are serviced by Halutik Fuels, a subsidiary of Makivik Corporation.

Halutik's fuel prices are based on what Shell paid when it purchased the fuel. The final retail price also reflects Shell's costs of doing business in Nunavik, including transport, and taxes.

The price per litre of premium gas in Nunavik's other communities, where distribution is handled by the regional cooperative network, the Fédération des cooperatives du Nouveau-Québec, also rose to $1.44 from $1.14 last year.

The FCNQ cost is somewhat lower than Halutik's because the impact of higher fuel price increases is shared among a greater number of communities.

The cost of premium gas, the only kind that is sold in Nunavik, is now just about the same as in southern Quebec.

On one day last week, in the wake of Hurricane Katrina's damage to U.S. oil production, the cost of a litre of regular gas in Montreal jumped from $1.09 to $1.34 in Montreal - more than double the 2003 cost for a litre of gas.

"There has never been such a small difference between the gas prices in Nunavik and Montreal. It's the first time this has happened," said Claude Savage, who heads the FCNQ's petrol division.

The FCNQ and Halutik make little profit on the gas, but their prices are subsidized by sales of other petroleum products.

"If we didn't sell heating oil, diesel, aviation fuel, gas would cost more than $2 a litre," Savage said.

Airline companies filling up in Nunavik will also face increases. The price per litre of aviation fuel has jumped from $1.20 to $1.42, although bulk fuel purchases for Air Inuit mean the company receives a discount to offset the increase in cost.

Heating oil, for which the FCNQ charged $1.07 in 2004, now costs $1.29 per litre.

But gas and oil prices could decrease - and if they don't, a serious recession becomes a definite possibility.

The Quebec government is bracing to lose at least $400 million due to higher gas and oil prices. This will cause a slowing of the provincial economy and inflation rates to rise - that is, less money and higher costs for all.

To save money and fuel, Quebec is turning down air conditioners in government offices after working hours and asking government vehicles to drive more slowly.

"We are facing a new world reality with respect to energy. This is an international problem. The volatility of prices was made much worse by the damage to refineries and platforms in the Gulf of Mexico [by hurricane Katrina]," said Pierre Corbeil, Quebec's minister of natural resources.

Quebec plans to seek federal aid during a provincial and territorial ministers' meeting later this month because each five-cent increase in oil prices adds an extra $22 million to its operating budget.

In the past, Makivik has offered its beneficiaries some help with high gas prices by providing a subsidy for hunters from its heritage fund.

And about $700,000 from Quebec's transport department has been divided every year between Nunavik's 14 communities to provide a non-taxable subsidy of "not more than $500" to all residents over 16. This money is handed out in October and November to cover the higher cost of gasoline in the region.

Quebec has also given the Kativik Regional Government money to pay rebates of up to $275 a year on airfare for residents who don't qualify for free trips through their employers.

Nunavik politicians continue to lobby in Ottawa and Quebec City for a reduction in government taxes, which bring in $1.5 billion a year. These add around 35 cents to every litre of gas sold in Quebec.

Now, consumers in southern Quebec are also asking for similar tax breaks.

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