Calculation error may have increased price of gas in Quebec
Published Thursday, December 6, 2018 2:23PM EST
Legislation that sets a minimum price of gasoline across Quebec may be responsible for overcharging drivers.
In 2007, in response to claims of price fixing by gasoline stations, the provincial government created legislation that forced gas stations to justify price changes to Quebec's Energy Board.
That law also lets the Energy Board set a minimum price for gasoline in Quebec based on the price of oil in order to guarantee stations a profit of four cents per litre.
However there are multiple prices for barrels of oil depending on its source, and the source used by the Energy Board -- known as the West Texas Intermediate-- is not the source for most of the oil refined or gasoline sold in Quebec.
For several years Quebec's been getting more oil from Western Canadian tar sands, and that oil sells at a substantially lower price, so low in recent months that the premier of Alberta has ordered a reduction in production in order to boost prices.
According to certain calculations, the Energy Board's minimum price has been 15 to 20 cents higher than what it should be.
"Assuming of course that the two oils had an impact on prices you would see a difference of more than 5-8 cents a litre but the overall thrust of the article, if I'm to understand it, is that there's an assumption that most of our oil is based on WTI. That is simply not correct," said Dan McTeague of Gasbuddy.com.
McTeague added that about one-fifth of the oil refined in the past month was coming in at WTI price.