Unreasonable gas price hikes in Montreal - A practice that penalizes consumers, says CAA-Quebec

QUEBEC CITY, March 27, 2015 /CNW Telbec/ - Montreal-area motorists have had to deal with nine unreasonable gasoline price increases in the ten weeks since the start of this year, observes CAA-Quebec, adding that consumers in the Greater Montreal Area are picking up the tab for inconsistent business practices. The organization, which represents 1.3 million members, recently questioned industry players about the magnitude of the pump-price hikes, which have varied between 5 cents and 14.5 cents during the period, swelling retailers' profit margins on each litre of fuel sold.

Difficult to make any sense of it all!
"As far as we can determine," says Sophie Gagnon, CAA-Quebec's Vice President, Communications and Public Affairs, "the primary explanation for this situation is simply the pursuit of additional profit, because market fluctuations and the taxes levied per litre of gas by themselves are not enough to justify these disproportionate increases. And why are these hikes only happening in Montreal?" she wonders.

"The increases are all the more outrageous because in some cases, we've seen the price go back down the very next day," Ms. Gagnon continues. "In our review of 2014 gas prices, we noted six unjustified increases on Fridays in Montreal. Less than three months into 2015, we've already seen nine disproportionate increases. The industry should be offering pump prices that more closely follow the movements of the petroleum price indicators and better reflect the market."

Contradictory explanations from industry players
Queried on the matter by CAA-Quebec, Sonia Marcotte, President and CEO of the Quebec Association of Independent Petroleum Marketers (known by its French acronym, AQUIP), says: "The lack of diversity of retail banners in Montreal works against healthy competition." Independent gas station operators, she says, are fringe players in Montreal, and are often located on secondary roads. CAA-Quebec, however, questions whether insufficient diversity alone is reason enough for such unreasonable increases.

The Canadian Fuels Association does not share AQUIP's view. Its Vice-President, Carol Montreuil, says industry players on the Island of Montreal are fiercely competitive, and that favours motorists. "Consumers are very well served by the free market, because at the end of the year, the retail margin isn't any higher compared with previous years," he notes. In CAA-Quebec's opinion, though, these increases are clearly penalizing drivers, because they can't take advantage of competitive prices at all times.

Could Quebec's carbon cap-and-trade scheme be at fault?
Even taking into account the increase in the rack price of three cents a litre that resulted from implementation of the provincial cap-and-trade carbon market in 2015, the increases seen at the pump are by and large unreasonable. "You have to remember that the acquisition cost has gone up for all gas stations in Quebec, not just those in Greater Montreal," Ms. Gagnon remarks. "At the end of the day, what matters to us is that motorists pay a realistic price for their gasoline that corresponds to the market reality. In the current situation, the explanations we've been given are not convincing to us."

Gasoline Watch
CAA-Quebec reminds the public that its Gasoline Watch tool is always available to motorists to help them make informed decisions when it comes to managing their fuel purchases. By comparing the realistic price calculated by CAA-Quebec with the average pump price for their region, consumers can see whether the time is right to fill the tank.

About CAA-Quebec
CAA-Quebec, a not-for-profit organization founded in 1904, provides automotive, travel, residential and financial services and privileges to its 1,290,000 members.

SOURCE CAA-Québec

Montreal, Anne-Sophie Hamel, Communications Advisor and Spokesperson, 514 861-7111, ext. 5478, Cell.: 514 717-4040, [email protected]; Quebec City, Catherine Major, Communications Advisor, 418 624-2424, ext. 5810, Cell.: 418 563-4590, [email protected]