Falling gas prices could signal bad news for Energy East pipeline project

Gasoline prices in New Brunswick have been dropping for five weeks in a row in the weekly setting by the province's Energy and Utilities Board.

The maximum price retailers are allowed to charge currently is 118.9 cents per litre, which is the lowest setting since Feb. 24, 2011, when the maximum price was 114.5 cents per litre.

• INTERACTIVE: New Brunswick's maximum gas prices since 2006

In some places, the price is even lower. The Costco gas bar in Fredericton is advertising the lowest prices in Atlantic Canada at $1.08 per litre.

"I'd like to see it go down below a dollar but I doubt it will," said Doug Deamude.

The price of gasoline in New Brunswick has plunged 17 cents a litre in the last month, due to slumping world oil prices.

While the drop in oil prices may be good news for consumers, it may be the opposite for backers of the proposed Energy East pipeline project that would bring crude oil from Alberta to Saint John's Irving Oil Ltd. refinery.

In 2009, Irving Oil cancelled a multi-billion plan to build a second refinery in Saint John after oil prices fell and the economy plunged in 2008.

The current price slump is not as serious yet, but economist Elizabeth Beale of the Atlantic Provinces Economic Council says swings in the price of oil will almost certainly affect how the pipeline develops.

"Price sensitivity can greatly affect timing," she said. "It doesn't always take projects out.

"It can take projects out in the past — as the proposal for a second refinery here in New Brunswick went off the agenda — but what it sure does is drag them out."