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Regulation of Gas Prices

Increasing gas prices have led many groups to call for government price regulation at the pumps. Currently two provinces -- Prince Edward Island and Newfoundland -- have regulation systems in place.

Prince Edward Island Regulatory System

Under the Island Petroleum Products Act, the government appointed Island Regulatory and Appeals Commission supervises all wholesalers and retailers with respect to the pricing of heating and motor vehicle fuel. The Commission has the following authority:

• Regulate the timing and frequency of price changes
• Determine the price and any change in the price of heating fuel and motor fuel.
• Determine the minimum and maximum markup between the wholesale price to the retailer and the retail price to the consumer of heating fuel and motor fuel.

Under this system, fuel wholesalers and retailers must apply to the Commission for any change in its prices. The Commission then assesses the application using its own calculations. The Commission may also unilaterally set fuel prices.

Currently, Prince Edward Island has the lowest motor vehicle fuel prices in the country, and has been well below the national average for 2002/03. On August 26, 2003, gas prices in Charlottetown were 70.1 cents per litre. This is in contrast to 91 cents in Vancouver, 79.9 in Calgary, and 85.9 in Toronto.

For more information visit, Island Petroleum Regulatory and Appeals Commission Website

Newfoundland Regulatory System

The Government of Newfoundland and Labrador established the Petroleum Products Pricing Commission as an independent entity to ensure fairness in marketing Petroleum products in the province. The Commission's mandate is as follows:

• Consulting, informing and educating stakeholders (i.e. consumers and petroleum companies)
• Establishing prices
• Monitoring prices
• Enforcing the Petroleum Pricing Act

In establishing prices in the province, the Commission regulates maximum prices of motor and heating fuel. The Commission publishes new maximum prices each month. Oil companies can sell for less, but they cannot sell for higher than the maximum allowable price in effect for that month.

Currently, Newfoundland gasoline prices are in the mid-range of 83 to 84 cents per litre. While this is not as low as the Prince Edward Island price of 70.1 cents, it is much lower than prices found in Ontario and Vancouver.

For more information visit, Petroleum Products Pricing Commission Website

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