Gasoline in Montreal finally below the Quebec average

Make no mistake, gasoline hasn’t been systematically more expensive on the island of Montreal than anywhere else in recent months.

Posted at 6:00 am

Karim Benessaieh

Karim Benessaieh
The press

According to a compilation of a trend appears to be establishing itself The press based on weekly data from the Régie de l’énergie du Québec. “Your observation is also consistent with CAA-Quebec’s observations,” spokeswoman Annie-Pier Dubois said via email. In recent months, the price displayed at the pump in Montreal has been below the Quebec average. »

As of January 2019, people in Montreal paid an average of 3.3¢ more than Quebec as a whole, which is 132.1¢ instead of 128.9¢ [NDLR : les données sont arrondies]. However, this average calculated over this entire period has large weekly fluctuations.

Before the spring of 2022, the average weekly gasoline price in Montreal had fallen below the Quebec average six times in three years. Since last April, in less than three months, this pleasant surprise has happened seven times.

One-time surcharge

This is all the more surprising given that the greater Montreal area has had a special gasoline tax since 1996. Originally set at 1.5¢ per liter, it was doubled to 3¢ per liter in 2010 to fund the Metropolitan Transport Agency. which became the Regional Metropolitan Transport Authority (ARTM) in 2017.

This 3¢ surcharge for the 83 municipalities in the ARTM area, plus excise taxes, would explain the average historical difference between metropolitan prices and the rest of Quebec.

This fact should not be forgotten. Conversely, in Quebec, there are tax rebates of 4.65 cents for regions such as Saguenay-Lac-Saint-Jean or Abitibi-Témiscamingue.

Sonia Marcotte, CEO of the Association of Quebec Energy Distributors (ADEQ)

The island of Montreal is not the area of ​​Quebec where gasoline is the most expensive. According to the average calculated since 2019, we have to pay the most in Nord-du-Québec and in the Gaspésie-Îles-de-la-Madeleine region. At the other end of the spectrum, prices per liter are lowest in Saguenay-Lac-Saint-Jean and Outaouais.

According to CAA-Quebec’s Annie-Pier Dubois, the 3¢ gas tax doesn’t explain everything, particularly the divide between Montreal and its 82 neighbors within the ARTM, from Contrecœur to Saint-Lazare and from Saint-Jérôme to Carignan.

“Prior to the last few months, gas stations in the Montreal region charged a higher retail margin than in several other Quebec regions, which meant the price displayed at the pump was higher,” she says. According to CAA-Quebec, the “realistic” price at the Montreal pump should be even lower, at 192.7 cents instead of 202.0 cents announced on Friday.

turmoil and adjustments

However, this explanation is contradicted by ADEQ, which has compared the profit margins of retailers in Canada’s three major cities since 2019. This margin was 5.5¢ in Montreal, 8¢ in Toronto, and 11.6¢ in Vancouver in 2019. In the first six months of 2022, the gap narrowed, but Montreal retailers still had the narrowest profit margin at 7¢, compared to 7.8¢ in Toronto and 8.1¢ in Vancouver.

“We see that Montreal has a smaller margin than other major cities,” says Mme Marcotte. There’s competition in Montreal, like everywhere else. »

How do you explain why the average price of gasoline in Montreal falls below the Quebec average? For the three experts interviewed, it is primarily an effect of the turbulence that has shaken the world oil market since the invasion of Ukraine.

In general, during periods of strong rises like the last four months, markets struggle to follow the trend. As a result, historical differences are no longer valid.

Carol Montreuil, Vice President of the Canadian Fuels Association

Above all, the price fluctuations at the refinery disrupt the market and are reflected in the price at the pump, analyzes Mme Marcotte. “I’ve never seen that, there’s 2 or 3¢ daily variations. »

With retailers and brands selling larger quantities of gasoline in the metropolis than in smaller markets, she believes adjustments will be made more quickly.

“In Montreal, the market is larger, there are more residents, there is a faster inventory turnover than in other regions. Price reactions are faster. »

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