Regulation is costing motorists more at the pumps, but most people seem satisfied with the stability it brings, a consulting firm says.

Gardner Pinfold Consulting also points out that it's too early to determine whether Nova Scotia's eight-month-old system is a success or failure.

The consultants say it's too early to determine whether gas price regulation is good or bad.
(CBC file)

In a report released Thursday, the consultants say gas retailers should pocket about $10 million to $11 million more this year under regulation.

For motorists, that works out to about one cent a litre more.

The consultants aren't blaming regulation as the sole cause and say more study is needed to determine what other market factors are at play.

But the trade-off for paying more, they say, is that consumers and retailers are seeing fewer price fluctuations, which means more stable and predictable prices.

"Regulation seems to be working from the perspective of price stability and more uniform prices across the province," said report author Michael Gardner.

Price stability was cited as one of the main goals when the Progressive Conservative government brought in regulation last July.

Under regulation, gas prices are fixed for a two-week period, though that cycle has been interrupted when international oil prices swing significantly.

The system factors in transportation costs, so the price of gas is a few cents higher in areas far from Halifax. Retailers are also guaranteed up to 5.5 cents in profits per litre for self-serve gasoline, more for full-serve.

The study, which included surveys and focus groups, says there are just as many gas stations in the province as there were before regulation.

'It will only get better'

"Many of the dealers who responded to our survey indicated they were better off with regulation," said Gardner.

Graham Conrad, with the provincial Retail Gasoline Dealers Association, agrees, saying "it will only get better as time goes on."

The Gardner Pinfold review covered only the first six months of the new system, which the consultants said wasn't enough time to determine whether regulation is working. They would like to see a review after a full year.

The consultants made four recommendations:

• Make price adjustments every week instead of two.
• Remove price cap on full-serve gas.
• Adopt a fixed formula for forward averaging.
• Conduct periodic reviews of regulation.

The government says it's reviewing the $132,000 report it commissioned.

"Certainly what Mr. Gardner has said does not give any compelling reason to scrap regulation," said Jamie Muir, the minister responsible for gas price regulation.

But the Liberals, who have been against regulation from the beginning, question whether Nova Scotians are really satisfied with the new system.

"I think Nova Scotians would look at it as $11 million that's being collected that they wouldn't otherwise be paying collectively," said Liberal MLA Diana Whalen.

Whalen also said some gas stations in rural parts of the province are closing while urban stations are expanding, which she said explains why the overall number hasn't changed.

"Even though we have the same number of stations that seem to be out there, they're not in the areas that we were out to help," she said.