Gas distributor says fixed prices are killing business

A distributorwho supplies gas to 25 stations in the northwestern part of New Brunswick has stopped shipping fuel, claiming the government's new gasoline price regulation regime is putting him out of business.

Hermel Michaud of Michaud Petroleum says the new rules leave him no margin to make a profit. "They're putting us all in very big trouble."

Michaud says the price he paysfor wholesalegas is the same as the regulated selling price, leaving him no money to operate his business.

Michaud says he called theprovincial Energy Departmentto report that he's stopped shipping gas to Shell stations and several independent gas retailers along theSt. John River valley from Edmundston to Woodstock.

Michaud says he'll have to start laying off his 64 employees if the government doesn't raise prices soon.

Minister says the system works

Energy Minister Brenda Fowlie says Michaudshould negotiate a new contract with his supplier. She maintains regulation is working.

She notes that in her hometownofQuispamsis, gas is being sold below the regulated maximum of $1.12 per litre. "The majority of the stations are selling at$1.114. That's a whole penny below the regulated market without any transportation costs built in."

Michaud says he can only point to the price he has to payata Shell depot four hours away in Quebec. That price, he says, is the same as the maximum he's allowed to charge retailers.

The provincial government began regulating the price of gasoline and home heating fuel on July 1.

For the moment those stations supplied by Michaud still have gas, but one retailer in Edmundston says she'll run out on Tuesday.

The Public Utilities Board is scheduled to set a new price for gasoline on Wednesday.