“Inflated Margins”: Gasoline dealers line their pockets in several regions

Gas station owners in most regions of Quebec, outside of the greater Montreal area, are lining their pockets with margins that CAA-Quebec no longer hesitates to call “excessive.”

Motorist protection avoids the word collusion. Nonetheless, he is observing a “new phenomenon” in which the price of gasoline sold in most of the province’s regions now exceeds that of the metropolitan area.

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“It’s a phenomenon that we began observing in April and hasn’t abated since then,” said CAA-Quebec spokesman David Marcille. The situation is all the more surprising given that the metropolis imposes taxes on public transport not found elsewhere. Despite everything, prices in the region are often higher than in the city.”

By region, CAA naturally includes the so-called remote regions such as Côte-Nord and Abitibi; but also closer regions like Estrie, Mauricie and Quebec. The observation is the same everywhere: the price at the pump is now tending to exceed that of Montreal.

Bromont petrol station

Photo Martin Chevalier

Bromont petrol station

In short, its representative says that only the “size of the gas stations” and the “excessive markups” they impose on consumers can explain the observed price differences at the pump, which persist despite the drop in the price of a barrel of oil since.

CAA estimates that the retail range (which sets operating costs – from 4.4 to 5.5 cents per liter – set by the Régie de l’énergie) should normally average around 9 cents per liter.

However, he observed that regional retailers have been charging average margins of more than 15 or 16 cents per liter since the spring, well above what CAA believes is reasonable.

“In Quebec, a city that doesn’t lack traffic in the summer, we’ve seen margins as high as 20 cents a liter, it seems to us [tout à fait] exaggerated,” said his spokesman.

A specialist in energy issues, visiting professor from the University of Ottawa’s Department of Economics, Jean-Thomas Bernard, is also trying to explain this phenomenon. One thing is for sure, he specifies, the conflict in Ukraine or a disruption in global logistics activities are not at issue here.

At all times and throughout America, gasoline prices have been higher in cities than in the regions, primarily because of higher running costs there.

“It’s quite an unusual situation. Really, on this point, the case of Quebec seems to me quite unique compared to what we see elsewhere in Canada.

Historically, Quebec has refused to regulate the price of gasoline, believing that free competition between retailers is enough to protect motorists from unreasonable increases at gas stations.

The problem, says CAA-Quebec’s Mr. Marcille, is that not all regions are benefiting from the “healthy competition” we want. The latter, for example, conjures up the case of regions where retailers would be content with their market share without wanting to discount that of their competitors.

Quebec Energy Distributors Association representative Sonia Marcotte believes that raising the minimum wage and increasing credit card company fees could justify this attempt by retailers to increase their margins.

Once in Ottawa, the Competitions Bureau cannot disclose the nature of its investigations and the complaints received. “However, the fight against anti-competitive behavior in the petrol sector is a priority,” added his spokesman.

Since 2008, a combined investigation conducted in Magog, Sherbrooke, Thetford Mines and Victoriaville has found 33 individuals and 12 companies guilty of gas price fixing in multiple markets and fined $6 million. In addition, six people were sentenced to a total of 54 months in prison and a total of 300 hours of community service.

retail margin1 Average on gasoline for the last 52 weeks2

– gas pressure: 15.8 cents

– Lower St. Laurentius: 15.2 cents

– North Coast: 14.1 cents

– Abitibi-Témiscamingue: 14.0 cents

– Capital National: 13.4 cents

– Chaudière-Appalaches: 12.4 cents

– Moritz: 11.8 cents

– Outaouais: 10.5 cents

– estria: 10.3 cents

– Central Quebec: 10.2 cents

-Laval: 9.8 cents

– Montreal: 9.6 cents

– Saguenay–Lac Saint Jean: 9.2 cents

– Monte control: 9.0 cents

– Laurentians: 8.7 cents

– Lanaudiere: 8.0 cents

1 Including consumption taxes.

2 Regular gas prices displayed in the major urban areas of each Quebec region. Based on Oil Price Information Service (OPIS) data.

Source: CAA-Quebec, dated September 13, 2022

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