Ontario fuel supply still strapped weeks after refinery fire

| 3/9/2007

The largest market for diesel fuel and gasoline in Canada has been running on "E" for nearly a month.

A fuel shortage in Ontario began following a fire Feb. 15 at Imperial Oil's Nanticoke refinery south of Hamilton. Other factors, including a rail strike and the annual winter icing of shipping lanes in the St. Lawrence Seaway, contributed to the diesel shortage.

"I think it was a wake-up call for people," Joanne Ritchie, executive director of the Owner-Operators Business Association of Canada, told Land Line. "It's an example of what happens when your supply chain is disrupted."

Prices for diesel and gasoline have inched upwards during the past few weeks in Ontario. In some areas, a liter of fuel went from 82 cents to about $1. Converted to U.S. gallons, that equates to a price increase of between 60 and 70 cents.

About 100 retail fuel stations were closed at one point in late February while Imperial Oil cut orders to its Esso retailers up to 40 percent, according to a company statement.

An Imperial Oil spokesman told Reuters the damaged refinery was back running at about 75-percent capacity on Wednesday, March 7. The plant refines about 118,000 barrels per day.

Imperial Oil supplies about 400 Esso retailers.

Ritchie said OBAC member truckers have not reported many problems with finding fuel. She said motorists have had a tougher time than truckers at their usual fill-up spots.

Imperial Oil officials have said they were hoping the Nanticoke refinery would be running at full capacity by the third week of March.

Imperial Oil is not the only Canadian company dealing with fuel shortages. The rail strike - which has since been resolved - and the icing over of the St. Lawrence Seaway have caused shortages to a smaller degree with Shell Canada and Petro-Canada, according to the Financial Post.

To combat the problem and find fuel for truckers, the Ontario Trucking Association called for the Federal Natural Resources Ministry to allow off-road diesel into the on-highway supply chain. That request was denied because the ministry does not have the authority to suspend the rule.

Ritchie said she believes the effects of the shortage will be felt for months.

"Even when that plant gets up and running again, there's still a capacity issue," she said.

- By David Tanner, staff writer