HALIFAX – Here’s a head-scratcher: The oil industry wants you to buy less gasoline.
Carol Montreuil, vice-president of the Canadian Petroleum Products Institute, said his industry is going through a demand crunch, and needs time to pay for the pipelines and refineries needed to transport and refine gasoline.
So if governments cut speed limits – every one km/h over 100 increases consumption by one per cent – made buildings more energy efficient and encouraged people to buy hybrids, the industry would actually approve, Montreuil said.
“The demand worldwide is going through the roof, so this is why it’s not contradictory to say that more control on the demand side would help everyone,” said Montreuil at an Atlantic Institute for Market Studies breakfast.
“It would help us as an industry get through the crunch and make the proper investment to bring this equilibrium in terms of supply and demand back in line and reduce the volatility.”
Though there is still a lot of supply, the infrastructure – the pipelines and refineries needed to transport and refine gasoline – is sorely lacking.
Given that there are so many factors that influence oil prices, and so few people who fully understand them, there can be demands for action when prices are volatile.
Hence, price regulation.
That’s a practice that results from politicians pandering to an uninformed populace, is more expensive than the free market and doesn’t solve energy needs, he said.
“Consumers don’t understand the complexities of these markets and see price going up and expect politicians to come in and do something about it.
“If you are to devise a model where you’re going to regulate the price at the pump, a model that will mimic all the complexities of the real world, you realize how complex this is. In doing so, you tend to simplify things. This simplification usually introduces inefficiencies in the model,” said Montreuil.
Interim Liberal leader Michel Samson agreed.
“When one looks at the instability of this entire market, I think (regulation is) simplistic. It’s going to cost Nova Scotians more, and it does not go to the root issue here, which is our overall dependence on petroleum products in Nova Scotia,” said Samson.
Twenty per cent of Canadians, said Samson, are dependent on home-heating oil.
In Nova Scotia, 60 per cent depend on it.
Governments from municipal through federal levels have a large role to play, he said.
He said his party is disappointed the provincial government is not introducing tax credits for buying fuel-efficient hybrid vehicles.