CAA-Quebec calls Montreal gas profits in 2016 'abnormal and questionable'

Montreal motorists are paying more than they should for gas, according to an analysis of 2016 gas prices by CAA-Quebec.

Pricing in Montreal should be more competitive and dynamic, CAA-Quebec warns

Montreal gas retailers enjoy profit margins that are 'abnormal and questionable,' CAA-Quebec claims. (Elise Amendola/Associated Press)

Montreal motorists are paying more than they should for gas, according to an analysis of 2016 gas prices by CAA-Quebec.

The high prices come despite the city's numerous high-volume gas stations, high sales volume per outlet and a broad range of banners, which CAA said should make pricing "more dynamic and more competitive."

The CAA observed higher retail profit margins in the Montreal region compared to other less populous areas of the province, which the association described as "abnormal and questionable."

The association has communicated its concerns to the Régie de l'énergie.

"All the conditions exist for healthy competition in Montreal, and we should be seeing tactics by some to counter the initiatives of others to gain market share, but no," said Sophie Gagnon, CAA-Quebec's vice-president of communications and public affairs, in a news release.

Prices fluctuate in unison, higher markup in Montreal

The CAA also noted that prices tended to fluctuate in unison across the metropolitan area, an observation that it said was confirmed by the Régie de l'énergie.

"Where are the benefits for consumers if every retailer follows the same price hikes at the same time, with no other choice? It's up to the industry to explain how this all works," Gagnon said.

CAA said the retail profit margin for each litre of gasoline was 6.9 cents in Montreal in 2016, compared to 2.6 cents in Quebec City, 3.8 cents in the Laurentians and 4.7 cents in the Mauricie region.

Compared to 2015, gross profits for 2016 fell by 41 per cent in Quebec City, 21.9 per cent in Lanaudière and 21.7 per cent in Mauricie, but only declined by 9.2 per cent in Montreal.

The price of crude oil declined by 16.3 per cent during that same period.

CAA-Quebec's study also found that three Friday gas price hikes in 2016 at pumps around Montreal were unjustified.

"So what justifies these three increases, with margins already high? Perhaps the industry could also answer this question," Gagnon said