Gouging ‘needs to stop’: Gates
MPP wants government regulation, gas expert says issue not so simple
Oil prices have hit a 10-year low, but drivers are not seeing the savings, says Niagara Falls MPP Wayne Gates.
The price of a barrel of oil reached a record low this week, dipping under $30 a barrel. Despite declining oil prices, the price of gas in Niagara continues to fluctuate wildly.
For example, an Esso station on Ontario Street in St. Catharines was charging 76.9 cents a litre Thursday, while an Esso on Lundy’s Lane was charging 92.5 cents.
The cheapest gas in St. Catharines is more than 10 cents less a litre than Niagara Falls, and average prices are above lows in 2008 and 2014, said Gates, who is the NDP’s transportation critic.
“Instead of seeing savings as the price of oil goes down, Niagara families continue to pay more for gas,” he said.
Gates called on the Liberal government to direct the Ontario Energy Board to monitor the price of gas across Ontario, reduce price volatility and “unfair” regional price differences, and to protect Ontario families from “price gouging” at the pump.
Five Canadian provinces have regulations on gasoline sales.
“When I initially brought this issue forward, the price of a barrel of oil was roughly $46 — today it’s barely hovering over $30, but drivers in Niagara haven’t witnessed any substantial savings,” said Gates.
“I’ve said it before and I’ll say it again: This is gouging and it needs to stop.”
But analyzing gas prices is not so simple, said Dan McTeague, a senior petroleum analyst with gasbuddy.com, a website that monitors gas prices across North America.
As an MP between 1993 and 2011, McTeague said he thought regulation was the “way to go.”
But after spending years breaking down certain figures and “putting everything into perspective,” he said it’s important to consider the “last few independents you have left who are holding the major (companies) to account.”
McTeague said the wholesale price of gas is 50.5 cents a litre.
But when provincial and federal taxes are included, that jumps to about 85 cents.
“That’s the cost for a gas station to acquire the gasoline and put it in the tanks, before considering the cost of selling it to you,” said McTeague, who is also the founder of tomorrowsgaspricetoday.com.
“You cannot operate at 85 cents or less.”
He said from there, stations have to charge so much on every litre of gas to cover the cost of running a business, which could bring the price for customers to about 93 cents a litre.
McTeague said there is a margin for crude and for refining gasoline.
According to gasbuddy.com, the average price for a litre of gas across Ontario Thursday afternoon was 92.5 cents — 93.3 across Canada.
McTeague said the price of gas can fluctuate from province to province because taxes are different.
He said Niagara residents shouldn’t look at the “tug of war” taking place between stations on Ontario Street in St. Catharines as an indication of what gas prices should be.
“That’s just Pioneer and Esso duking it out. It’s a mirage. It’s not reflective of the actual prices.”