Ontario calls upon Competition Bureau to investigate gas prices

Archived Release

Ontario calls upon Competition Bureau to investigate gas prices

Ministry of Consumer Services

TORONTO, Sept. 22 - The Competition Bureau needs to investigate the refining, wholesaling and retailing of gasoline to ensure consumers in Ontario and across Canada are paying a fair price, said Minister of Government Services Gerry Phillips today. In a letter to Sheridan Scott, the Commissioner of the Competition Bureau of Canada, Phillips said it's time for the bureau "to ensure that Ontarians are paying a fair price for fuel across the province. We need to be sure that consumers are being protected from an excess of market power that is concentrated in the hands of a small number of energy companies." Even though Hurricane Katrina had an impact on the price of gasoline, the tragedy on the Gulf coast and speculation about Hurricane Rita do not explain why prices in some areas spiked to nearly $2.00 per litre when the market trend has been going in the opposite direction. It also does not explain why prices change faster and vary more between regions in Ontario than in neighbouring U.S. states. "I'm becoming very concerned that these prices do not reflect the market as a whole and give consumers the false impression that there is a shortage of gasoline," said Phillips. "I am urging the Competition Bureau to investigate these prices and report their findings promptly." Disponible en fran├žais www.mgs.gov.on.ca Ms. Sheridan Scott Commissioner Competition Bureau Canada 50 Victoria Street Gatineau PQ K1A 0C9 September 22, 2005 Dear Ms. Scott: I am becoming increasingly concerned about high gasoline prices, and the effect they are having on Ontario consumers and the overall economy. Hurricane Katrina was a tragedy and had a deep impact on all of us. While the disruptions experienced in the wake of Katrina and speculation about hurricane Rita are bound to impact on fuel prices, it fails to explain why prices in Ontario rose more than those in neighbouring states in the US. It fails to explain why prices are varying so severely between various cities, towns and regions across the province. It fails to explain why prices were so quick to go up, yet are so slow to go down, especially in some regions of the province. Prices in the Windsor-Chatham corridor have been seen as high as $1.80 per litre, completely counter to the current market trend. There are reports of gasoline charges in Waterloo as high as $1.99. These do not reflect the market as a whole and give consumers the false impression that there is a shortage of gasoline. The Federal Competition Bureau needs to exercise its authority to ensure that Ontarians are paying a fair price for fuel across the province. We need to be sure that consumers are being protected from an excess of market power that is concentrated in the hands of a small number of energy companies. To that end, I am requesting that the Competition Bureau investigate the refining, wholesale and retail gasoline markets in Ontario, and report its findings promptly as this is a concern that affects all Ontarians. Sincerely, Gerry Phillips Minister of Government Services Government of OntarioFor further information: Contacts: Ciaran Ganley, Minister's Office, (416) 212-3547, Jason Okamura, Communications Branch, (416) 326-8538