Halifax – As of February 1st, 2009, Atlantic Canadians have paid more than $155-million extra for gasoline because of price regulation in their provinces.
While governments say it’s worth the extra few cents per fill-up, only consumers can decide whether or not price regulation is worth it. With each litre pumped, the cents keep racking up and the dollar figure keeps climbing and climbing.
To keep track of the cost to consumers of gas price regulation, the Atlantic Institute for Market Studies (AIMS) is launching on its website the Money Guzzling Gas Regulation Gauge. The gauges track the extra money consumers have paid in each Atlantic province, and will be active on the AIMS website (www.AIMS.ca) by 0800h on February 2nd, 2009. That’s 18 years, almost to the day, since gas price regulation began in the region on Prince Edward Island.
Here’s how it works. 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 we see that the cost of regulation 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.
And 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 (July 1st, 2006), and where the government’s own report estimates the cost at 0.58 cents per litre (0.51 cents before tax), 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.
The AIMS Money Guzzling Gas Regulation Gauge at www.AIMS.ca updates the figure second by second.
“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 background paper, What’s Missing From Your Wallet?: How gas price regulation robs from consumers, click here.
For more information, contact:
Bobby O’Keefe, Research Manager
Barbara Pike, Director of Communications