Fuel price increase still unclear as new federal regulations set to kick in

The price of fuel will go up on July 1 on P.E.I., but motorists and homeowners may not know by how much until they fill up their tanks.

The federal government's carbon tax and its new Clean Fuel Regulations will take effect at the end of the month, and estimates about how much the cost of gas and heating oil will rise by 2030 range between six and 17 cents a litre.

• How will the new clean fuel standards arriving on July 1 affect you? Send us an e-mail to ask@cbc.ca.

There is such concern over the disproportionate impact on the Atlantic provinces that the four premiers have sent a letter to Prime Minister Justin Trudeau requesting a meeting to ask for a pause on the implementation of the regulations.

In the letter, which CBC News has received, the premiers reinforced their commitment to addressing climate change and transitioning to renewable and non-emitting energy development.

"However," the letter added, "we are increasingly concerned that federal measures with a known disproportionate impact on Atlantic Canada are proceeding and will take effect on July 1, 2023, resulting in significant price increases for gasoline and diesel."

"These increases will create additional inflationary pressures on Atlantic Canadians and come at a time when the cost of living continues to increase."

Premiers 'dismayed'

The letter came after a meeting last Wednesday between the Atlantic premiers and federal Environment Minister Stephen Guilbeault. The premiers said they were "dismayed" that Guilbeault "did not offer any solutions to rectify the inequitable burden shouldered by Atlantic Canadians as a result of the regulations."

In an interview Thursday with CBC News: Compass host Louise Martin, Guilbeault said the government does expect a fuel price increase between six and eight cents by 2030, and that Atlantic provinces will see a bigger impact compared to other parts of the country.

But he said the federal government is investing heavily in the biofuel industry in the Atlantic region, and has plans to support people while the green transition takes place.

"If we help you get off home heating oil through heat pumps, for example, and we're already supporting a program that was in place by the government of Prince Edward Island, then your price of electricity [doesn't] go up and down the way oil prices go," he said.

"It's cheaper, more efficient and more environmentally friendly to go towards heat pumps and our goal is to help tens of thousands of Atlantic Canadians get off home heating oil [and] towards those more efficient systems."

The new regulations will require producers and importers to gradually start selling cleaner fuel. 

Irving Oil has said they will have to raise their price about eight cents a litre in order to comply, but Guilbeault said it shouldn't be necessary.

"No other refineries across Canada has said that they had to increase their price of gasoline by eight cents come July 1st," he said.

"Companies' refineries don't have to comply before July 1st of 2024. So why Irving would claim they have to increase the price of gasoline is unexplainable for me."

In a statement to CBC News last month, Irving Oil said the cost of motor fuels is set independently of government and industry.