Alberta Premier Jason Kenney says he will ask the Competition Bureau of Canada to probe “potential gasoline price-fixing” in the province amid concerns motorists are no longer seeing the benefit of the government’s fuel tax cut.
This spring, the UCP government slashed the 13¢ per litre provincial tax in a bid to give consumers a break as pump prices soared to historic levels.
But Kenney said in a release Friday that, over the past 10 days, “the gas price advantage Albertans have enjoyed relative to other provinces has disappeared and it now appears Albertans are no longer benefiting from the tax cut.”
“As I said when we announced this measure in March, we won’t accept any games being played with this,” the premier said in a statement.
Kenney said he met Friday with the Canadian Fuels Association, which represents the country’s transportation fuels industry, “to demand an explanation” for why this has happened.
‘Albertans deserve to know’
An official with the association told CBC News it did not have a spokesperson available Friday to speak to the matter.
Kenney said he had also talked to the competition bureau about the situation. Under the Competition Act, he said, it is illegal for competitors to mutually agree to set prices.
“Albertans deserve to know if this is going on,” he said, adding he has told Service Alberta to find out if there are any tools the province could use under its Consumer Protection Act.
University of Calgary economist Trevor Tombe has also been watching gasoline prices in the province. He said it’s important to remember that gasoline prices rise and fall for all sorts of reasons.
“For the first few months following that April 1st reduction in the gas tax, it did look like it was basically fully passed through to consumers,” Tombe told CBC News.
“But in recent days — actually in the past two weeks or so — that gap between where Alberta is and where you think it would have been had the tax not been reduced, they’ve kind of converged to each other. And so it looks like the tax is not being passed through to the same degree that it was before.”
Tombe said the new development is puzzling, but he doesn’t think it’s due to price gouging or a lack of competition among retail stations.
“I don’t think those explanations hold any water at all,” he said.
“If we look at diesel, for example, I’m still finding that the tax reduction in diesel is being fully passed through to consumers there. So it’s not obvious that it’s a lack of competition or corporate greed or price gouging or anything like that. But it is a mystery.”
He said one explanation he has heard — one he calls “potentially plausible” — is a shortage of ethanol, which is blended with gasoline, is adding to stations’ costs and those costs are being passed through to consumers.
Earlier in the day, Kathleen Ganley, the Alberta NDP’s energy critic, took aim the province.
“I called on the UCP to take action to prevent this in April, and they failed to do so,” she said in a statement, charging that the fuel tax relief was adding to the profit margins of gas stations.
“Now Albertans are paying 13 cents a litre more to fill up than they should be, just as many families are preparing for summer road trips.”