MP Jay Hill's Weekly Report

This week I would like to address a very flammable issue … the price of gasoline in our region.

Like me, many constituents are frustrated, even irate, that the price of gasoline in many of our local communities remains stubbornly high despite a plunge in oil prices to roughly US$65 per barrel. What’s worse, while gas prices have dropped significantly in other areas of Canada, we haven’t benefitted nearly as much across Prince George-Peace River.

So what’s going on? Are we being gouged? And if so, what can be done about it?

While the delivery distance from the refineries and depots to some of our more remote communities, such as Fort Nelson, is a factor, it represents a relatively small portion of the price per litre.

The BC provincial carbon tax, which currently accounts for 2.41 cents per litre, doesn’t help matters. Nor does the fact that production at three refineries in Alberta has been disrupted, severely restricting area gasoline supplies until recently.

Still, these factors cannot adequately explain the significant price differential between our riding and other parts of BC. Rather, the unique market conditions in selected areas are keeping gas prices higher.

Some area residents have demanded the government step in and regulate gas prices. However, Canada is a democratic nation with a free market economy driven by the actions of consumers. If we start setting gasoline prices, what’s next? While there is some regulation in the delivery cost of natural gas for example, the price of the commodity itself remains subject to supply and demand.

The government does have an important role in enforcing federal competition laws to ensure no collusion takes place among the oil companies. Collusion is very difficult to prove but several gas stations in Quebec were charged this year and netted fines totalling $2-million. Investigations are ongoing in other Canadian markets.

In the meantime, keep up the pressure. The oil companies have been bombarded with complaints and I encourage constituents to continue this. Yet ultimately, it’s your actions at the pump that will make the difference. Even here in the north where driving is a necessity and not an option, the oil companies admit consumers can force gas prices to drop by hitting them where it hurts … their sales volumes.

At some point, we start making choices, where and when we can, on not making that extra trip or sharing a ride, and our gas consumption goes down. In some markets, consumers have influenced pump prices by targeting a particular gas station. Once one station in a market sees their sales drop and blinks, the other stations follow. That’s how gas price wars get started.

You can find out more about fuel prices on the National Energy Board of Canada’s website, www.neb.gc.ca, with information on pricing for gasoline, as well as natural gas, propane and electricity. Also, Natural Resources Canada’s Fuel Focus website, www.fuelfocus.gc.ca, offers timely information on gas prices and the oil and gas markets.

And finally, monitor and share information with your neighbours and fellow consumers on fuel prices in your community at www.bcgasprices.com.