AIMS fears gas committee will pump up fuel prices

by Peter McLaughlin

The all-party committee that hopes to come up with a means to rein in volatile gasoline prices is getting too sympathetic with the plight of struggling independent retailers, the president of a market research group warned yesterday.

Brian Crowley, of the Atlantic Institute of Market Studies, accused the Select Committee on Petroleum Product Pricing of losing track of its mandate and leaning toward recommending regulatory measures that will, in fact, boost prices at the pump.

He said any move to guarantee increased retail margins by three to five cents a litre – which dealers say they need – will increase the cost of gasoline by $36 million to $60 million, based on yearly gasoline sales of 1.2 billion litres.

“The committee hasn’t issued its report and they haven’t made a decision, but I’d say they’ve made no secret of the fact they are considering regulatory means to deal with these problems,” said Crowley.

The six public hearings have been dominated by gasoline retailers, and their concerns that being squeezed by the big oil wholesalers is driving them out of business. The number of independent retailers has dropped from 900 to less than 500 since deregulation of the industry in 1991.

Retailers say their margins have shrunk to two cents a litre from about eight cents.

Crowley, who attended the last public meeting in Truro this week, said he senses the committee will recommend retail price support to ensure fatter margins for retailers.

“The evidence is that such price support will not come out of margins for the oil and gas industry, but out of the pockets of consumers,” he said.

But committee vice-chairman Russell MacKinnon said MLAs still have an open mind, even though there is sympathy for the retailers.

“Retailers were making a plea for a guaranteed minimum profit, and members heard that plea and certainly expressed empathy with that; however, there are other issues on the table,” said the Cape Breton West Liberal MLA.

Cape Breton Centre NDP MLA Frank Corbett said retailer and wholesale margins are part of the commitee’s mandate.

He slammed Crowley for trying to pre-suppose the conclusions of the committee.

“This is a man who sees half the movie and tells everyone in the lobby how it ends,” said Corbett.

Brooke Taylor, Tory MLA for Colchester-Musquodoboit Valley, said retail concerns must be addressed, but he thinks it can be done with out passing the cost on to consumers.