Gas retailers want an end to deep discounts

New Brunswick motorists regularly enjoy the lowest gasoline prices in Atlantic Canada, but retailers say that often comes at their expense.

Charging more won't work alone, say consultants, station owners

Gas retailers before EUB seeking ways to increase profitability. 2:02

New Brunswick motorists regularly enjoy the lowest gasoline prices in Atlantic Canada, but retailers say that often comes at their expense.

And although there is a proposal in front of the province's Energy and Utilities Board to let gas stations charge more, station owners say that alone won't help.

"The retailing of gasoline is a fiercely competitive business," said Michael Ervin of the Kent Group, a Calgary-based consultantcy hired by the EUB to recommend changes in amounts New Brunswick petroleum retailers can charge consumers.

Ervin is recommending stations be allowed to increase prices by 4/10ths of a cent to recover growing expenses.

But big discounters like Costco have made it impossible to charge existing margins and keep any business.

The Atlantic Convenience Stores Association is in favour of increased margins for retailers, said the group's senior consultant, David Knight.

But the association is afraid it will be an empty gesture for many stations unless there's a law banning Costco-style price discounts at the same time.

"A convenience store and a gas outlet are often the only ones who remain in a rural community. You take those away and people tend to say, 'Why are we here?' You lose that fabric, that community fabric," said Knight.

Fredericton gasoline prices are the lowest in Atlantic Canada. It's popular with consumers and the province has consistently said it has no intention of banning the discounts by adopting minimum gasoline prices.

That makes the EUB hearing on raising retailer margins almost moot, since many retailers won't be able to raise prices even if they are allowed.

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