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Question: 3 
When will the Board make an extraordinary price adjustment?

An extraordinary adjustment of maximum prices outside of the scheduled weekly adjustment may be made by the Board where it is warranted in the circumstances. These adjustments occur when the Board determines that it is necessary to change maximum prices to provide for the recovery of the costs of supply or to ensure that consumers do not pay more than necessary to provide for recovery of these costs.

The Board will consider whether an extraordinary adjustment is warranted when there is a variance in the range of +/- 6.0 to 8.0 cents per litre in either the daily benchmark price or the running average benchmark price.  In making its determination the Board considers all relevant factors, including the magnitude of the change in the daily benchmark price, the variance in the running average benchmark price compared to the established benchmark price, trends in the data, and well as the timing of the last and next adjustment. There is no interruption formula set out in the legislation.

Until early 2022 extraordinary adjustments were rare. In eac of 2005 and 2008 there were extraordinary adjustments in response to market volatility associated with hurricanes. In 2020 there was also an extraordinary adjustment related to market volatility associated with the Covid-19 pandemic. Since the beginning of 2022 there have been numerous extraordinary adjustments as a result of significant volatility in global commodity market prices.

 

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