As of February 1st, 2009, Atlantic Canadians paid more than $155-million extra for gasoline because of price regulation in their provinces.
What’s Missing from your Wallet? How gas price regulation robs consumers explains how that figure is reached and why it’s actually a conservative estimate.
It’s estimated by oil industry experts that government regulation of gasoline prices adds between 1.0 to 1.5 cents a litre. Even using (where available) government’s own estimate of the per litre cost of gasoline price regulation the cost is 0.51 cents a litre in Nova Scotia, 1.31 cents a litre in Newfoundland and Labrador, 0.31 cents a litre in New Brunswick, and 1.54 cent a litre in PEI.
In What’s Missing from your Wallet, AIMS Research Manager Bobby O’Keefe also points out that is only the added cost per litre BEFORE sales taxes. So for every $1.00 extra paid for gas, the governments in Atlantic Canada get a bonus of 13 to 15.5 cents. So now that’s an extra cost of 0.35 cents a litre in New Brunswick, 0.58 cents a litre in Nova Scotia, 1.48 cents a litre in Newfoundland and Labrador, and 1.78 cents per litre in PEI.
Using Statistics Canada estimates for the volume of gas sold in each province and the estimated cost of price regulation per litre in each province, AIMS calculated the cost of price regulation since its inception in each province to February 1st, 2009. By province the cost is:
In New Brunswick the regulation came into effect on July 1st, 2006. Based on Statistics Canada consumption for the province and the 0.35 cents per litre extra (including tax) that gas price regulation adds to the cost, as of February 1st, 2009 New Brunswickers paid $9.4 million extra for their gasoline.
- In Nova Scotia, where regulation started that same day, and where the government’s own report estimates the cost at 0.58 cents per litre, consumers have paid $17.8 million more.
- In Newfoundland and Labrador the cost is approximately 1.48 cents per litre for a tally of more than $65.2 million since regulation began in October of 2001.
- And in PEI, which introduced gas price regulation 18 years ago, on February 1st, 1991, and the cost is estimated at 1.78 cents a litre for a whopping $63.0 million.
“Every litre of gas purchased increases those totals, and the AIMS Guzzling Gas Regulation Gauge is tracking every penny,” says AIMS Executive Vice President Charles Cirtwill.
“Governments brought in regulation promising price stability or predictability, or that it was needed to keep rural retailers in business, or to maintain industry infrastructure. But millions of dollars into this poor policy, the only thing they know for sure is that we, as consumers, pay more for gas than we would without regulation. No matter how they try to spin it, the bottom line is, you are paying millions of dollars more for your gasoline because of price regulation. It’s time for us as consumers to decide whether or not it is worth it.”
To read the complete background paper, What’s Missing from your Wallet?, click here.