Some Canadians Wake to Gas at $2 a Litre

By ALLISON DUNFIELD

Thursday, September 22, 2005 Posted at 5:27 PM EDT

Globe and Mail Update

The New Democratic party wants the federal government to make oil companies accountable for ever-mounting fuel prices in the wake of hurricane Katrina and the expected cost of hurricane Rita.

On the same day that a Commons industry committee held a hearing on fuel and gasoline prices, some consumers awoke in Ontario to find that gas prices had lept up past $2 per litre.

Two stations in Stratford, Ont. opened on Tuesday charging $2.24 a litre, although their prices dropped later in the day to under $1.

Just after 3 p.m. EDT, a station in Barrie, Ont. was reportedly charging $1.99. Other service stations in that southern Ontario city were charging less.

This kind of wild fluctuation must be stopped, NDP industry critic Brian Masse told the committe Thursday.

He said it is time for the Liberals to end their silence on the issue.

"Make energy a government priority," Mr. Masse told the committee. He said that, while the weather cannot be controlled, the government can regulate how the industry passes costs on to the consumer.

Oil firms say gas prices are high because of supply and the likely impact of hurricane Rita. The category 5 storm is currently headed on a northerly course toward a Saturday landfall in Texas.

Mr. Masse said a meaningful response to the crisis by the Canadian government should include transparency, accountability, efficiency and the ability to protect vulnerable people from high prices.

"Canadians have been getting fleeced at the pumps while oil companies continue to rake in huge profits," Mr. Masse said.

"It's unacceptable for Liberals and Conservatives to keep defending the oil industry — enjoying record profits and not being held to account for its pricing practices."

He suggested that the government needs to look beyond the competition bureau to regulate prices.

The New Democrats say they will spend the upcoming session of Parliament, which begins Monday, pushing for Ottawa to look at other alternatives besides oil.

He said the party will also be pushing the government to embrace the NDP-Liberal budget's $900-million worth of environmental initiatives, including helping homeowners to reduce their energy use with energy efficient systems.

The oil industry, meanwhile, is telling MPs it understands frustration over high gasoline prices.

But it says prices are set by supply and demand, and hurricane Rita may yet add more costs at the pump.

Ultramar Ltd. vice-president Ross Bayus told the Commons industry committee Thursday that world demand in 2004 was at its highest since 1978, with refiners struggling to keep up with demand and operating at near full capacity in Canada.

Mr. Bayus said hurricane Katrina levelled 5 per cent of the refining capacity of the United States for several months.

He noted that two Texas refineries in Rita's path have been closed and said that will add to price pressures.

Mr. Bayus told MPs that persistent and radical demand in Asia has also added to volatility.
Another member of the oil industry says consumers would reap the benefit if the federal government agreed to cut gasoline taxes.

Alain Perez, president of the Canadian Petroleum Products Industry, told the committee that the industry would pass on any tax cut.

Opposition MPs and some consumer groups want a cut of one or two cents in the 10-cent federal excise tax on gasoline to help ease the impact of high fuel prices.

Ontario Premier Dalton McGuinty, meanwhile, said Thursday that the federal Competition Bureau should investigate soaring gasoline prices in Ontario and quickly try to determine why there are huge price swings reported across the province.

Some government backbenchers want legislation to impose a 90-day gas price freeze or to appoint a provincial gas price watchdog, ideas Mr. McGuinty rejected even though he had supported them when the Liberals were in Opposition.

Users of Web site GasBuddy.com reported Thursday that prices were at a high of $1.29 a litre in the Toronto, down to a lowest reported price of 95 cents in the previous 24 hours.

In Vancouver, the lowest prices Wednesday according to vancouvergasprices.com were about $1 a litre and the highest prices were up to $1.17.

In Calgary on Thursday, the prices ranged from a low of around 90 cents a litre to $101.9.

In Nova Scotia, prices ranged from $1.10 per litre, to $1.16 per litre.

With reports from Canadian Press

I guess this is good for transit and the environment across the country. There's the gas tax, right?

Impossible, the hurricane hasn't hit yet.
If you EVER see a gas station changing it's prices after the stock exchange closes, call the police and make them fine the gas station.
Thanx.

In wiarton gas prices stayed at 104.9 all day yesterday, but today they only had premium left at 115.9. Gas prices at the UPI in hepworth went from 103.9 at around 11 to 170.9, then back to 103.9 at 2. Prices in Owen Sound have been all over the place

It's hard to believe that i saw huge lineups last night at Yonge and Steeles for gas that was 104.

I don't know. As far as I'm concerned, gas companies can charge what they choose to charge. As long as there's more than a couple of competing companies I don't think governments should step in.

Bring back the NEP!!!

Bring back the NEP!!!

And cause another recession. Or worse yet the country will fall apart as Alberta will probably seperate if that were to happen.

^^

The NEP never caused a recession. Canada and the world went through deflation (inflation + recession) during the oil shocks in the 70's because of the high price of oil itself and not because of the National Energy Policy of the Trudeau administration.

I agree on the second idea though... Albertan hicks would probably revolt and set up a little banana republic.

Alberta sadly needs to wake up and realize they're still part of Canada, and always will be.
They're starting to get on the Quebec bandwaggon. I don't appreciate it at all as a Canadian.
I don't tend to sterotype, but Albertians seem rather bitter towards the rest of Canada, and I can't see why.

^^

The NEP never caused a recession. Canada and the world went through deflation (inflation + recession) during the oil shocks in the 70's because of the high price of oil itself and not because of the National Energy Policy of the Trudeau administration.

I agree on the second idea though... Albertan hicks would probably revolt and set up a little banana republic.

Alberta suffered a deep recession though, compounded by low gas prices. The bigger problem is that the rest of Canada does not acknowledge it.

This is predatory scamming by the oil companies IMO.

Alberta sadly needs to wake up and realize they're still part of Canada, and always will be.
They're starting to get on the Quebec bandwaggon. I don't appreciate it at all as a Canadian.
I don't tend to sterotype, but Albertians seem rather bitter towards the rest of Canada, and I can't see why.
Can you elaborate as none of the Albertans I know feel that way (and given I now live in Calgary, I know a more than a few).

Bring back the NEP!!!

Well if you believe that the role of the NEP was to provide subsidized energy to central Canada, I think you may be on to an excellent idea here. In fact, I think Quebec can take a lead in bringing back the NEP by setting a great example, particularly since pro-Kyoto Quebec is so against dirty energy.

As you know, Quebec “buys” all the electricity from NFLD’s Churchill Falls project for 0.3 cents/Kwh (but that rate is only set for the next 50 years). It then goes about and sells all that electricity to Ontario at rates of up to 10 cents/Kwh – only a mark up of 3000%.

If Quebec were then to lead by example and sell all that electricity (which by the way equals 20% of Ontario’s total demand) at only 2 cents/Kwh (it needs some profit to upkeep the transmission lines) I believe the oil producing provinces would then be shamed into supporting a return of the NEP.

Call me as soon as Quebec decides to lead by example and I’ll head the campaign to get Alberta to embrace a new NEP!!

do you guys notice an increasing number of hybrid cars on the road? I saw two new Toyota prius in my neighbourhood today.

I don't know. As far as I'm concerned, gas companies can charge what they choose to charge. As long as there's more than a couple of competing companies I don't think governments should step in.


I share your sentiments completely. The days of price fixing between gas stations are long gone. If you don't like a price at one station, go to another. It's just like any other product or service in the market.

The other issue is whether the gov't instead reduce gas taxes. A permanent gas tax reduction is stupid, as this is a temporary oil shock environment. However, I"m also against a temporary one because a) it will be very hard for the government to increase it once it's reduced and b) Unfortantly tough love seems to be the only way to ween people off oil as every other attempt (campaigns, advertising, civic mindedness, environmental) have failed to get people to reduce their consumption.

Thank god for sin taxes. How would our country be without Gas, Tobacco, and Alcohol. This is all about choices because really it is simple if you chose to use you should pay! :)

…The NEP never caused a recession. Canada and the world went through deflation (inflation + recession) during the oil shocks in the 70's… Deflation is the opposite of inflation –– what Japan has been experiencing. What you are referring to is stagflation; economic stagnation and inflation together.

And as for gas prices; they aren't as free market as some would idealistically believe. Take OPEC for example: a cartel by any other name.

Take OPEC for examplePoor example. OPEC has very little control over the gas prices as has been frequently demonstrated in the past. They increase and decrease production trying to control the price, but just as often as not it goes in the opposite direction they wanted it to. One of the reasons for this is that at any given time there is one or more companies who output more than their quota allows for.

Refinery output, natural disasters, speculation, and estimated reserve quatities seem to have far more impact individually or in combination.

Also one thing people seem to forget is that OPEC only represents 1/3rd of the oil market. That leaves 2/3rd throughout all the non-OPEC members including USA, Russia, Canada, Norway, among the most notables.
In many industries you will see 33% control in one company with the rest spread out and the market is still healthy. Take Coke, Microsoft, etc for example.
I think OPEC has too often been used as a scapegoat to blame problems that are merely a supply and demand issue.

If the NEP is brought back then Alberta is gone and I wouldn't blame them. Natural resources are clearly a provincial juristiction.
I have an idea.
If the NEP comes back then Quebec can send electricity to Alberta for free, all those juicy federal government jobs in Hull can go to Calgary, Ontario can sell all their cars for half price but the raw stell would be exported for free, of course.
Why is it when Quebec gets money it being "unique" and a good chunk don't want anything to do with Canada, except when its in their best interest like cheap oil from Alberta.

Also one thing people seem to forget is that OPEC only represents 1/3rd of the oil market. That leaves 2/3rd throughout all the non-OPEC members including USA, Russia, Canada, Norway, among the most notables.
"OPEC's member countries hold about two-thirds [2/3] of the world's oil reserves. They supply 40% of the world's oil production and half [1/2] of the exports. Last year, OPEC's 11 members … received $338 billion in revenue from oil exports, a 42 percent increase from 2003, according to figures compiled by the federal Energy Information Administration" (New York Times, Jan. 28, 2005).
The oil industry – like any other oligopoly – has an ability to determine prices through output. If there were a competitive market, consumers would be better off.

Some sample prices (highs & lows) from across Canada over the last few days:

City - Highest - Lowest
St.John's NL 145.6 - 115.3
Halifax 145.9 - 105.9
Saint John NB 149.2 - 89.9
Montreal 127.5 - 85.9
Toronto 149.9 - 93.5
Winnipeg 132.8 - 98.9
Regina 137.9 - 96.4
Calgary 148.9 - 89.0
Vancouver 148.9 - 92.9
Yellowknife 148.9 - 104.9

Source:
http://gasticker.com/pricelist.php?location=36

Can you elaborate as none of the Albertans I know feel that way (and given I now live in Calgary, I know a more than a few).

Well, you're lucky then. You're surrounded by true Canadians which is how it should be.
I haven't been so lucky in my encounters, nor have most people I know.
Coincidence? Perhaps.

Opposition hammers Liberals over gas prices

CANADIAN PRESS

OTTAWA — The Liberal government promised today to create a national body to monitor gasoline prices as opponents pummelled it over sky-high rates at the pumps.

The pledge came as all three opposition parties, smelling political blood, ganged up on the government for failing to stop spiralling prices.

“(We’ll) ensure that we do put in place a mechanism for monitoring gas and home heating fuel prices in the months ahead,” said Industry Minister David Emerson.

It remained unclear how long it would take to create such a body or even whether it could make a dent in fuel costs.

Cabinet hasn’t yet studied the plan, government officials said. The list of mechanisms being considered ranges from a new national agency to a website that would be run from an existing department.

An early draft proposal is being worked on by acting Natural Resources Minister John McCallum, who just took over his new portfolio.

But the government faced growing pressure to do something and was considering an array of measures today.

One possibility is toughening the Competition Act to single out gasoline companies in the event collusion and price-gouging are ever proven, said a government source.

Finance Minister Ralph Goodale is also looking at rebates or other measures to help low-income Canadians deal with fuel prices, officials said.

With an election likely months away, all opposition parties are detecting political gold in an issue that has outraged motorists across the country.

The last minority government — Joe Clark’s Conservatives — was toppled largely because of anger over fuel taxes in 1979.

The Tories, Bloc Quebecois and NDP used the return of the House of Commons from its summer break to demand price relief.

The Conservatives said the government should cap GST charges on gasoline in a move they said would save motorists up to five cents a litre.

“From the cozy confines of 24 Sussex, the Prime Minister (Paul Martin) continues to dither on tax relief for Canadians,” said Tory deputy leader Peter MacKay.

“When is the government going to give Canadians a tax break and stop gouging them on the high cost of oil and gas?”

The government flatly rejected calls for a GST cap. Finance Minister Ralph Goodale said such a tax cut could instantly be swallowed at the pumps by gas companies.

“A tax break of two or three cents per litre would rapidly become invisible. Indeed, the industry suggests we would need a forensic auditor to find (it),” Goodale said.

The NDP called for cash incentives that would steer people toward green technology. They also called for an investigation into fuel prices.

The Competition Bureau has conducted five such investigations into allegations of collusion in the gasoline industry since 1990. It has concluded each time that there is no evidence of collusion.

A gasoline industry official cited those studies — and some anecdotal evidence — as proof that gas prices are fair.

Just look at gas stations nowadays that stay alive by opening up sandwich stands, restaurant franchises and selling everything from coffee to sunglasses, said industry official Dane Baily.

“You don’t see what we used to see 20 years ago — a couple of pumps and a kiosk,” said Baily, vice-president of the Canadian Petroleum Producers Institute.

“That just isn’t a business model that’s profitable anymore, that can survive.”

Two-thirds of gas stations set their own prices which fluctuate according to the neighbourhood competition; only one-third have their prices set by larger refiners, he said.

City - Highest - Lowest
Saint John NB 149.2 - 89.9
Source:
http://gasticker.com/pricelist.php?location=36
The highest gas went up to in Saint John was 139.9. That was only at 1 or 2 stations. During the aftermath of Katrina, all stations were 129.9

Also, gas was definitely not 89.9!!!! Where the hell was that? What station??

Gas is currently 111.9 in Saint John.