Canadian gas prices may spike at $1 per litre
Date: Wednesday, February 12 2003
Topic: International News
Angry Canadians are looking for someone to blame as they face record high prices at the gas pumps. The average price of gas this week is 80 cents a litre --- up from 60 cents just a year ago.
Analysts say gas prices could spike at $1 in some Canadian cities and they predict consumers likely won't get relief until later this year, when global events have taken their course. The situation has left drivers feeling frustrated.
"It's just a big scam for the oil companies to pick up some money," one consumer told CTV News. Another said there's "some gouging going on somewhere down the line."
Canada's oil industry says high prices are a result of several factors including a possible war in Iraq, a prolonged strike in Venezuela and an unusually cold winter.
This is happening, "because those commodities are world market price driven," Dane Baily, vice-president of the Canadian Petroleum Products Institute, told CTV News.
While drivers are feeling the pinch in their pocketbooks, oil profits are way up. Companies say the higher profits are largely the result of higher prices.
At Petro-Canada, profit for the three months ending December 31 was $370 million -- a 393 per cent improvement over the same period a year earlier. Imperial Oil made $454 million profit, up 100 per cent.
MP Pat Martin and the NDP say they've had enough. They want a national energy price commission to regulate pump prices. Martin unveiled a private member's bill in the House of Commons Wednesday.
Martin, the MP from Winnipeg-Centre, says drivers and heating oil consumers need to be protected "from predatory pricing, global monopolies and anti-competitive oil interests."
He added that oil firms are seizing on war worries to raise their rates.
"Within two hours of Colin Powell's speech last Wednesday, gas prices went up 10 cents a litre in Canadian cities, even though the price of crude closed unchanged," Martin said.
"It's no wonder Canadians think they're being gouged. Many think the war profiteers are in full swing before a single shot is fired."
Prices for gasoline and heating oil in Canada have surged to their highest level in years, and could rise even further.
Martin said "spot-market speculators, hoping to profit from war by raising energy prices" are to blame for the recent hikes.
"The Liberals should act on the priorities of Canadians and protect our citizens from predatory pricing, global monopolies and anti-competitive oil interests," added Martin.
Martin's bill would, he said, create an Energy Price Commission to regulate energy costs.
Oil companies and other energy producers would have to "justify and defend" cost increases before the commission, which would also promote "renewable energy, energy conservation measures and energy efficiency."
Martin's bill is a long-shot since private member's bills rarely become law.
Oil, war and politics
Earlier this week, NDP MP Bill Blaikie told the House of Commons that Canadians are being gouged on the pretext of war and demanded to know what the Liberals were going to do.
Industry Minister Allan Rock replied that retail pricing is a provincial matter. He added that the federal Competition Bureau has examined the oil industry several times and found no evidence of collusion or other wrongdoing.
Despite Martin's assertions, the price of crude oil has been rising in recent weeks. In the New York Mercantile Exchange, where the price of oil delivered in March rose 96 cents US to $35.44 a barrel -- its highest level since October, 2000.
Michael Ervin, president of M. J. Ervin, said the full impact of that rise has not yet been felt, and that the average pump price in Canada likely would rise by up to another two cents.
Calgary oil and gas analyst Wilf Gobert says even if war in Iraq becomes a certainty, relief from high petroleum rises is likely not imminent.
"I'm more than 50 per cent of the persuasion that there will be more negative dominoes, that war in Iraq would have a longer lasting negative effect on world oil supply than we think," Gobert told CTV News earlier this week.
In New Brunswick, where gas prices are as high as 96 cents a litre, provincial NDP Leader Elizabeth Weir introduced a bill that she said would help to control gasoline prices by promoting competition.
The bill would guarantee that independent gas retailers would pay the same wholesale price as outlets run by the oil companies.
But the government abruptly adjourned debate on the bill Wednesday, effectively killing it.
Energy Minister Jeannot Volpe says Weir's suggestion is not new, and would only drive gas companies out of the province. He says debate was adjourned in order to move on to debate of the government's new Electricity Act.