Quebec City, June 18, 2009 – On seven occasions between this past March 30 and June 12 – a period of 11 consecutive weeks –, retailers in the Greater Montreal region increased the pump price of gasoline immediately before the weekend. Five of these seven price hikes appear to have been unjustified, because they cannot be explained by an increase in petroleum price indicators on the markets.

Excessively high margins
In addition to decrying these pre-weekend price increases, CAA-Quebec believes that retail margins (which include retailers’ operating expenses as well as their profits) during this period were, for the most part, too high. For every litre of gasoline purchased, motorists had to contend with retail margins of between 6.6 and 11 cents – far in excess of the 52-week average margin of 4.7 cents/litre for Montreal, as calculated by the Régie de l’énergie.

“The industry’s behaviour in the Montreal market over these last 11 weeks definitely raises questions,” emphasizes Sophie Gagnon, CAA-Quebec’s Senior Director, Public and Government Relations. “The fact that the price of gas went up seven times on a Friday over a period of 11 weeks, whereas this happened only six times during all of 2007 and 11 times in 2008, is troubling indeed.”

In CAA-Quebec’s opinion, coming as they did right before the weekend, the price hikes had a direct impact on consumers, who typically take advantage of the weekend to travel more than they do at other times. “If there are price increases in response to a higher acquisition cost to the retailer, this is understandable,” Ms. Gagnon explains. “Anticipating increases that never materialize is something else entirely. There is also the fact that the impact of these unjustified Friday price hikes is exacerbated because the needlessly higher prices remain in effect throughout the weekend.”

Stability in Quebec City and Sherbrooke
In addition, the Quebec City and Sherbrooke markets were not affected – or at least not overly so – by Friday price increases during the same period. Rather, these markets are characterized by sometimes prolonged stretches of price stability – which, it should be noted, are not necessarily a guarantee of better prices for consumers.

Lastly, CAA-Quebec reminds the public that anyone can use its Gasoline Watch microsite, to quickly find out the “realistic price” of gas in any of Quebec’s regions, as well as detailed information on the factors that influence pump prices.

CAA-Quebec, a not-for-profit organization founded in 1904, provides automotive, travel, residential and financial services and privileges to its one million members.

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