By OGJ editors
HOUSTON, Dec. 2 -- Fluctuating gasoline prices in Canada in early 2003 stemmed from the oil and gas industry's competitive reactions to international events and to abnormally cold weather in North America last winter, concluded a government report.
Last month, the Standing Committee on Industry, Science, and Technology issued its "Gasoline Prices in Canada" report following a series of public hearings that involved testimony from Canada's Competition Bureau, industry executives, and industry critics.
"No evidence was presented to the committee of a conspiracy to raise and fix prices, nor was there evidence presented of abusive behavior on the part of vertically integrated suppliers in the form of squeezing retail margins to eliminate or discipline independent retailers," the committee's report said.
The Canadian Petroleum Products Institute (CPPI) noted that this was the first time a government committee representing elected officials from all political parties had found that gasoline price hikes resulted from a competitive reaction to external events.
CPPI supports the report's sole recommendation that the federal government create a petroleum monitoring agency to collect and distribute information on petroleum prices in the US and Canada. CPPI member companies operate 17 refineries and supply 10,000 retail stations with fuel.
"Commodity markets are unpredictable, and we understand why consumers can be confused, and at times frustrated, by changes in price," said Alain Perez, CPPI president. "The report states that 'the lion's share [of the retail gasoline price] is garnered by governments, whose taxes account for 40% of the average revenues earned for the 4-week period ending Sept. 9."
In addition, the Competition Bureau stated that it conducted four major investigations into the Canadian gasoline industry since 1990 and found no evidence suggesting that periodic price increases stemmed from a national or regional conspiracy to limit gasoline supply or by abusive behavior from oil companies.
