Quebec granted $90,000 to an Ontario professor to evaluate gasoline price differences and retailer margins, and find solutions to have more competition in this sector.
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Hired by the Ministry of Economy, Innovation and Energy, Robert Clark, professor at Queen’s University in Kingston (Ontario) and associate professor at HEC Montréal, must be ready to submit his report here at the end of February. This is a private contract for a maximum amount of $90,000.
Queen’s University Professor and HEC Associate Professor Robert Clark
Photo provided by Queen’s University
The professor’s mandate is to study the gasoline market and try to explain significant price differences – sometimes 10 cents or more – between retailers, with a particular focus on the profit margins of gas stations. It will then recommend possible solutions to ensure healthy competition in the industry.
“People are suffering”
Last week in Gaspé, Energy Minister Pierre Fitzgibbon indicated that he had discovered that in certain regions such as Gaspésie and the Quebec region the retailers’ margin seems higher than elsewhere in Quebec.
The minister then affirmed, during a press briefing, that Mr. Clark had discovered collusion in the gasoline sector in the 2000s. “It was he, moreover, who found in 2006 that there had been collusion between certain gasoline companies […]so Mr. Clark will help us see if there is something we need to change,” he said, in comments reported by ICI Gaspésie–Îles-de-la-Madeleine.
Mr. Fitzgibbon intends in particular to look at what changes could be made to the Energy Authority. “Is it up to the Minister of Energy to say: “We are going to set the margin per retailer”? I don’t know if we’ll go that far. We will wait for the report to see. Maybe we’ll remove the minimum price? Maybe there will no longer be a minimum price at some point?” he said.
“I think people are suffering. We see regions where, indeed, the margins are higher,” he added.
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A qualified expert
Robert Clark did not call back The newspaper. But the renowned economist Marcel Boyer has worked with the latter on several occasions, whom he perceives as “very qualified” to exercise this mandate.
“He wrote several papers on gasoline prices and the gasoline cartel in Quebec in the 2000s. He is someone who knows the gasoline field without a doubt,” he says.
Mr. Boyer had also been the economist retained by the competition office at the time to study the impact of the gasoline cartel on prices.
“At the time the government had wiretapped certain companies, but showing that there was an impact on prices required a very sophisticated analysis and it was me who testified in court. Mr. Clark and his colleagues also obtained access to certain data and wrote papers on this particular cartel,” he recalls.
Professor Clark has notably published scientific articles on collusion in the food and pharmaceutical sectors in the United States and gasoline in Quebec.
A necessary investigation
Remember that in November, dissatisfied with the explanations of large gasoline retailers on the abnormally high price of fuel in Quebec, Minister Pierre Fitzgibbon said he wanted to do his own investigation.
“We hired someone who will come to work, who will go see each gasoline store to better understand the dynamics that could be favorable to Quebec compared to others, which means that the price is high,” declared the Newspaper the Minister of the Economy last November, leaving his meeting with the leaders of four of the five main fuel retailers in the Quebec region.
The bosses of Couche-Tard, Pétroles Cadeko, Harnois Énergie and Sobeys made no comments when they left the meeting, essentially contenting themselves with looking at the floor as they headed towards the door.
– With Gabriel Côté