The Board is permitted to divide the province into zones and, in so doing, is required to consider historical prices throughout the province and the factors which may explain differences in these prices, including transportation costs, volume of sales, storage costs, distribution costs, and inventory turnover rates. The zone differentials do not change weekly.

Zone differentials are added to benchmark prices to reflect the additional costs for the transportation storage and distribution of the product to a particular zone. These include the additional costs associated with:

• marine freight
• the operation of marine terminals and bulk storage facilities
• tank wagon or tanker truck delivery
• the cost of filling, handling and delivering drums.

The factors which may impact supply costs in a zone may include distances between communities and supply points, volumes of sales and weather and climactic conditions.

Changes are made to the zone differentials through an order of the Board, either on the Board’s own motion or an application by a retailer or wholesaler. When adjusting the zone differentials the Board considers whether there have been changes in transportation costs, volume of sales, storage costs, distribution costs and inventory rates since the last adjustment. The zone differentials for Labrador were recently reviewed in the Labrador Petroleum Products Pricing Review.

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