Fuel suppliers coy on profit margins
Most gas suppliers in British Columbia are refusing to share how they set prices at the pump just days before hearings on the issue are set to begin at a public inquiry.
The B.C. Utilities Commission has been ordered to review the last four years of gas and diesel pricing in the province and asked suppliers to complete a questionnaire about various business aspects including their profit margins.
Commission CEO David Morton said the inquiry panel is working to determine if it needs the financial information and to assure the companies that it won’t release confidential information.
“I don’t think there’s any cause for alarm,” Morton said in an interview on Wednesday.
The suppliers range from Shell and Imperial to Suncor, Husky, Super Save and 7-11, but documents submitted to the commission show that only 7-11 has responded with details about how it sets the price per litre at the pumps.
It has requested the information not be released publicly and the utilities commission has complied, posting a redacted version of 7-11’s questionnaire response on its website.
The other suppliers offered almost identical reasons for withholding profit margin data, with Husky’s submission citing “commercially sensitive information” that is “not shared publicly or between refiners.”
As the price of a litre of regular gasoline climbed above $1.70 in Vancouver in mid-May, Premier John Horgan ordered the probe, saying that gas and diesel price increases were “alarming, increasingly out of line with the rest of Canada, and people in B.C. deserve answers.”
The inquiry timetable calls for the release of the second phase of the utilities commission consultant report by next Wednesday, followed by up to four days of oral submissions, where panel members can question industry representatives, including gas and diesel suppliers.
Bruce Ralston, minister of jobs, trade and technology, said in a statement that he’s disappointed with the companies that refused to provide the information and urged them to co-operate.
“People deserve to know why the price of gasoline in B.C. has seen such wild swings,” Ralston said.
But Morton said he’s not surprised that most of the companies withheld the information.
The utilities commission has established procedures for dealing with confidential information, including commercial information around prices that would harm the company if released, but it typically works with gas and electric utilities.
“Many of the participants aren’t as familiar with our approach to confidentiality so we understand there may be some apprehension around it,” Morton said.
If the organizations can show they would experience harm because a competitive price became public, then the utilities commission would typically honour that, he said.
“If there’s information critical to the inquiry of that nature, then the panel would review that information and we would make a decision but we wouldn’t make a reference to any of those numbers in the decision.”
The commission generally tries to avoid confidential information in its proceedings because it means decisions may have to be redacted, which it doesn’t consider to be “the best outcome,” Morton said.
Morton, who is on the inquiry panel, said they are in the process of reviewing the submissions and may determine that they don’t actually need specific numbers to answer the inquiry’s questions of why B.C.’s gas prices are different from the rest of the country and why the prices swing.
If the panel determines the figures are vital to the inquiry, and the companies still refuse to share them, the commission can apply through the B.C. Supreme Court for access.
That would set back the inquiry’s timeline but it remains on schedule so far, Morton said.
When the commission unveiled the process for the inquiry in May, the utilities commission said it would explore factors potentially affecting prices in B.C. since 2015, including competition and the amount of fuel in storage.
It is also expected to examine mechanisms that could be used to moderate price fluctuations and increases.
The three-person inquiry panel must submit its final report by Aug. 30.