How fuel prices are set in Newfoundland and Labrador — and what the PUB actually does

Fuel prices in Newfoundland and Labrador are not set directly by gas stations, oil companies, or the government but by a regulated system overseen by the Public Utilities Board.

The PUB is an independent regulatory body responsible for setting the maximum price for gasoline, diesel and home heating fuels across the province — a system introduced in 2001 to stabilize prices and ensure supply in both urban and rural areas.

A system built on global markets

At the core of the pricing system is the benchmark price, which reflects the cost of fuel on international markets.

That price is based on a five-day average of fuel trading prices, typically tied to markets such as New York Harbour, and converted into Canadian dollars.

Because of this, global events — including oil supply disruptions or currency changes — can directly affect what drivers pay at the pump in Newfoundland and Labrador.

Adding the local costs

Once the benchmark price is set, the PUB adds a series of regulated costs to reflect getting fuel to consumers.

These include:

• A wholesale mark-up, covering transportation, storage and distribution

• A retail mark-up, covering gas station operating costs such as wages, rent and utilities

Together, these form the total allowed markup, which is set by the PUB and does not change weekly.

Why prices differ across the province

Fuel prices also vary depending on location.

The province is divided into multiple pricing zones, with additional costs — known as zone differentials — added to account for higher transportation and delivery expenses in more remote areas.

This is why drivers in rural or northern regions often pay more than those in the St. John’s area.

While the PUB sets a ceiling on fuel prices, it does not fix the exact price consumers must pay. Retailers are allowed to charge less than the maximum, but in practice, most stations sell fuel at or near the regulated cap.

The system is designed to balance two goals: protecting consumers from extreme price swings while ensuring companies can continue to supply fuel across a geographically large and sparsely populated province.