P.E.I. Premier Rob Lantz says the Island Regulatory and Appeals Commission is reviewing how it sets gasoline prices, as fuel costs on the Island and globally continue to climb amid the U.S.-Israel war against Iran.

There were questions in the legislature on Tuesday about gas prices and whether P.E.I. should switch to use the New York Harbour benchmark price to determine prices at the pump.

Currently, IRAC uses what’s known as the Charlottetown rack price in its formula. That’s the price charged to trucks at the oil tanks on the shore of Charlottetown Harbour — essentially the cost of buying fuel straight from the terminal.

The rack price serves as the base, and largest component, of the pricing formula, before taxes and margins for wholesalers and retailers are added to arrive at the final retail price.

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Meanwhile, the other three Atlantic provinces use the New York Harbour benchmark, an international standard, based on the price of gasoline as it is shipped out of the harbour in New York City.

Because the Charlottetown rack price is typically higher than that benchmark, it often results in higher prices for Islanders.

“Using the New York Harbour pricing as a benchmark could quickly lower gas prices for Islanders. Why have you not changed that benchmark?” Green Party Leader Matt MacFarlane asked Lantz in the legislature Tuesday.

“The Charlottetown benchmark is something I think that needs to be looked at — but that includes transportation costs to get to Prince Edward Island,” Lantz said.

“We will look at any measure that helps relieve the costs of fuel here in Prince Edward Island. And I believe that the formula used by IRAC in regulating our gas prices used to use the New York benchmark, and if it’s beneficial to Islanders, we should return to that formula.”

As of Wednesday, the price of regular gasoline on P.E.I. is at $1.98 per litre, up nearly 35 per cent since the war began.

Opposition Leader Hal Perry later pressed Lantz on whether switching to the New York benchmark is “a definite change that’s going to happen.”

“IRAC is already on the record to say that they’re reviewing the formula and what they use for the benchmark. So there’s the answer for the Leader of the Opposition,” Lantz said.

Lantz also said that provincial revenues from gas are not tied to increases in price, as the provincial tax on gas is fixed at a flat rate per litre.

There was no timeline on if or when P.E.I. could switch back to using the New York Harbour price formula.