QUEBEC CITY, Feb. 4, 2013 /CNW Telbec/ - CAA-Quebec's daily observations
of gasoline prices confirm what is already known: pump prices, as well
as retail margins and crude oil prices, all rose in 2012 from 2011. And
as if this were not enough, the Greater Montreal area saw numerous
unjustified price hikes prior to weekends and holiday periods.
Retail margins on the rise
In Quebec, a litre of gasoline sold on average for 5% more in 2012 than
in 2011. In the Montreal area, the average price of a litre of gasoline
rose to 137.3 cents, compared with 134.7 cents in the Quebec City area
and 135.6 cents in Sherbrooke. And although retailers' margins rose to
a lesser degree in Montreal and Quebec City, the situation was
different in Sherbrooke, where the retail margin rose sharply, to a
level 19% higher than in 2011. The retail margin in Sherbrooke climbed
from 5.7 cents for each litre of gasoline sold in 2011 to 6.8 cents per
litre in 2012. In Montreal, a 2% rise in their margin enabled retailers
to reap average gross profits of 5.9 cents per litre of gasoline, while
in Quebec City the increase was 7%, resulting in a retail margin of
6.4 cents a litre. The average margin across the province was 5.6 cents
An economic law turned on its head
"The increase in the retail margin is certainly not good news for
motorists, especially in large markets with high sales volumes," notes
Sophie Gagnon, CAA-Quebec's Assistant Vice President, Public and
Government Relations. "Once again, the industry should explain why
service outlets in the smaller municipalities can get by with much
lower retail margins than those in the major urban areas, even though
there are fewer of them and they sell much less gasoline. This is true,
for example, in Victoriaville and Princeville, in the Centre-du-Québec
region, where the margin is 3.2 cents per litre, Lachute in the
Laurentians, where it is 3.5 cents a litre, and Saint-Lin in
Lanaudière, where it is 3.8 cents a litre. Meanwhile, the margin is
nearly twice as high in Quebec City and Montreal, a situation
incompatible with the concept of supply and demand."
Holidays are beneficial - for the industry!
Of the three markets analyzed most closely, Montreal is where a more
careful look is needed with respect to price hikes on Fridays and just
before holiday periods. Twelve price increases at the pump were noted
on Fridays in Montreal, compared with only one in Quebec City and two
in Sherbrooke. And of these 12 increases, eight appear unjustified.
Moreover, just before the year's eight long weekends or holiday
periods, five increases occurred in Montreal. Of these five, three had
no justification, taking into account the movements in market
indicators and the retail margins applied previously, whereas Quebec
City and Sherbrooke saw no anomalies of this sort.
"It is very disturbing to see so many unjustified increases," Ms. Gagnon
laments. "When motorists take advantage of the weekend to escape to
visit family or friends, the industry makes sure it gets the maximum
profit from each litre of gasoline sold by imposing increases with no
basis. And what can you say about unjustified increases just before
In contrast, the price at the pump in Sherbrooke did not budge over a
period of 49 consecutive working days! From January 12 to March 20,
gasoline sold at 134.4 cents per litre, with the retail margin varying
between 8.4 cents a litre and 2 cents/litre. Price stability can be
very misleading for motorists, because oil indicators fluctuate
constantly, and the same should apply to the price at the pump to give
consumers a realistic price that takes account of the real indicators.
Not adjusting prices at the pump when the context justifies it also
amounts to taking advantage of consumers. In Sherbrooke, there were at
least three other periods of stability in 2012 lasting no fewer than 21
working days. In Quebec City, four instances of stability were
observed, two of them lasting 22 consecutive days. No similar situation
was observed in Montreal.
Another piece of bad news: a tax increase
Montreal remains the city where the rate of taxation on the average
price of a litre of regular gasoline is the highest among large cities
in the Canadian provinces and territories. Taxes add 36% to the price
of gasoline in Montreal, compared with a Canadian average of 31%. And
on April 1, 2013, the provincial fuel tax will rise by one cent a litre
for the fourth year in a row.
Price trend in 2013
The American Automobile Association (AAA) notes that, with the national
price in 2012 averaging US$3.60 a gallon, equivalent to 95 cents a
litre in Canada, gasoline has never been as expensive in the United
States. But with gas prices having been especially high in the last few
years, AAA analysts do not foresee any significant increase during the
current year and say prices could even go lower than in 2012. Weaker
demand and higher U.S. oil production seem to be the two main factors
for the expected price stability or slight decrease.
Many other interesting statistics regarding gasoline in 2012 can be
found at caaquebec.com.
CAA-Quebec, a not-for-profit organization founded in 1904, provides
automotive, travel, residential and financial services and privileges
to its 1,195,000 members.
For further information:
514 861-7111, ext. 3210
Cell.: 514 717-4040
Officer Communications Advisor
418 624-2424, ext. 2418
Cell.: 418 580-1633