Consumer group calls for probe into gas prices

Last Updated: Wednesday, May 2, 2007 | 8:30 AM MT

CBC News

A consumer advocacy group is calling on the federal government to investigate gasoline prices after they spiked noticeably on Tuesday.

'At this point, it doesn't even matter anymore what the reasons behind the price rise are.'—Bruce Cran, Consumers' Association of Canada

Bruce Cran, president of the Consumers' Association of Canada, said motorists need to be protected, noting that they were frustrated with industry explanations of low supply, high demand and refinery problems.

Industry analysts say refinery problems, low inventories and disturbances at refineries are to blame for the price hike.
(CBC)

"At this point, it doesn't even matter anymore what the reasons behind the price rise are," Cran said.

Prices were still above $1 a litre in many regions of the country on Wednesday, with a national average of $1.107 a litre, according to the gas monitoring website gasbuddy.com.

Stations in Victoria charged the highest prices in the country at $1.227, with Vancouver close behind at $1.212. Meanwhile, drivers in Edmonton are paying the lowest prices in Canada at $1.052 a litre.

Low supplies, high demand cause spike, analysts say

Industry analysts have noted that refinery problems, low inventories and production disturbances, including an attack earlier this week on an oil ship in Nigeria, are to blame for the price hike.

'If [American drivers] see that our prices are much lower, well, they're just going to come across the border and they'll buy up our gasoline and head south —Jon Hamilton, Petro-Canada

"The wholesale prices in Canada for gasoline are tied very much to the U.S.," said Jon Hamilton, director of communications for Petro-Canada's refining and retailing divisions.

"The U.S. is having some refining issues now, which has caused the supplies to drop. Usually this time of year heading into the driving season they're building inventories in the U.S. but that just hasn't been happening."

Hamilton also noted that Canadian companies are forced to match prices in the United States out of necessity.

"Our prices have to be competitive with [U.S.] prices because if they see that our prices are much lower, well, they're just going to come across the border and they'll buy up our gasoline and head south," he said.

According to MJ Ervin & Associates' weekly pump price survey, released Tuesday afternoon, the national average reached $1.102 per litre, up from $1.053 the week of April 24. Stations in Labrador City, N.L., charged the most, at $1.245 a litre, while drivers in Lethbridge, Alta., paid the lowest prices, at 96.3 cents per litre.