KENORA, ON - Greg Rickford is getting his wish.
On Wednesday, the Kenora-Rainy River MPP held a teleconference to announce the Competition Bureau of Canada will examine retail gasoline prices in Northwestern Ontario.
Rickford requested an investigation at a press conference in November where he alleged a lack of competition among gasoline retailers was the reason for high gas prices.
“They’re going to be taking a very close look at industry participants,” he said on Wednesday. “I’m very pleased to have this positive response.”
Drivers in Northwestern Ontario have traditionally payed a higher price at the pumps, however Rickford took notice of a trend after the removal of cap-and-trade carbon tax costs from wholesale prices in October. The legislation promised a reduction in gas prices for consumers, and while the rest of Ontario saw a decrease, it wasn’t immediately the case in Northwestern Ontario.
While Thunder Bay’s average monthly wholesale gas price fell, the retail price remained relatively stable - registering at $1.423 per litre in October, down from $1.454 per litre in August.
Gas prices have since dipped as low as $1.229 per litre, a drop which Rickford says is without explanation.
“I’m looking for simple explanations into how, and why we pay what we pay.”
Rickford was blunt in his confusion about gas prices in Northwestern Ontario, and says it’s a sentiment shared by citizens in the region.
“The talk at every coffee shop in every riding as far as Thunder Bay was about the price of gasoline,” Rickford said.
Dan McTeague, a senior petroleum analyst at gasbuddy.com, says the real question lies in the disparity of retail margin.
The retail margin is described as the gap left over from what the supplier pays
According to an analysis by McTeague, retail margins in Thunder Bay land in the neighbourhood of 24 cents per litre. That’s double what McTeague describes as industry standard.
Rickford, who provided data from Kent Group Ltd. during a November press conference, pointed out a retail margin of 20 cents per litre.
“I don’t know how to explain it,” McTeague said.
“People in Northwestern Ontario are paying more in general, and their retail margins are almost double.”
He says the most likely theory, which coincides with Rickford, is the lack of competition. The number of retailers that service the region’s gas stations is low in comparison to other parts of the province.
“In other cities you see big retailers such as Costco who will attack margins, and drive those margins down,” McTeague said. “But if nobody wants to drop their margin it will stay as is.”
Rickford is hoping the investigation will find new explanations among a number of questions he has.
“Lower gas prices, an understanding of what the hell is going on, and how gas prices can be transparent for all of Ontario.”
The letter from the Canadian Competition Bureau reads that since 2008, 33 individuals and 12 companies have pleaded or been found guilty of fixing the price of gasoline in Ontario and Quebec.
However, McGuire estimates the price mystery will remain.
“My guess: if nobody wants to drop, and there’s nothing illegal, no abrasive dominants, no conspiracy collusion… not much will come of this.”
