Gasoline sellers get all clear

Dan McTeague, the Liberal MP for the Ontario riding of Pickering-Ajax-Uxbridge and one of the industry's fiercest critics, was attending a funeral and couldn't attend the committee's session. Mr. McTeague, the committee's vice-chair, has said the high margins are buried at the refinery level and cost consumers about 10 cents a litre.

The Globe and Mail
May 6, 2003

Gasoline sellers get all clear
Federal competition watchdog declares no evidence of price-fixing, collusion
Simon Tuck

OTTAWA — There's no evidence that gasoline sellers in Canada are guilty of collusion or any inappropriate activity, the federal competition regulator told a parliamentary committee yesterday, dealing a serious body blow to those who believe the oil industry's major players artificially set pump prices.

Konrad von Finckenstein, Canada's Competition Bureau commissioner, told the industry committee that his office has conducted four major investigations into the gas-selling industry since 1990 "and found no evidence to suggest that periodic price increases resulted from a national or regional conspiracy to limit competition."

Testifying on the first day of the committee's review of gas prices, Mr. von Finckenstein told MPs that Canadians enjoy some of the lowest pump prices in the world, which are about the same as those in the United States when taxes are excluded.

When prices rise sharply, he added, market forces usually cause them to fall shortly thereafter.

"We're very aware when prices go up, but when prices go down, it's taken for granted."

Mr. von Finckenstein also said gas prices are lower than in 1980, when inflation is accounted for.
Dave Chatters, a Canadian Alliance MP who represents the Alberta riding of Athabasca, said he's always believed that government taxes represent the industry's only "bogey men."

Dan McTeague, the Liberal MP for the Ontario riding of Pickering-Ajax-Uxbridge and one of the industry's fiercest critics, was attending a funeral and couldn't attend the committee's session. Mr. McTeague, the committee's vice-chair, has said the high margins are buried at the refinery level and cost consumers about 10 cents a litre.

But Paul Szabo, the Liberal MP for Mississauga North, questioned whether the industry uses international crises to boost profit margins — not just prices — at the pumps.

Mr. von Finckenstein said he's seen no evidence of that. The federal regulator has also found no reason to believe that gas stations raise prices before long weekends, as many industry critics allege, Mr. von Finckenstein added.

The Competition Bureau is the federal body designed to administer the rules governing price fixing, price maintenance, mergers, and the abuse of market dominance.

The bureau does not have the authority to regulate gas prices.

The committee decided in February to call the heads of Canada's biggest oil companies to justify the soaring cost of gasoline, as crude oil pushed toward a 12-year high. Prices, however, have since tumbled, falling below 50 cents a litre in Toronto and some other centres over the weekend.

The MPs also plan to examine the economic damage resulting from high energy prices.


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