The price of gasoline, which has peaked in recent weeks in Quebec and around the world, has very real consequences for citizens and businesses.
According to various community organizations, citizens suffer from it especially in the regions, where they are forced to use their car for all trips.
“Families and people with low incomes are forced to go further and further from complete living environments (where businesses and day-to-day services are accessible by active or public transport) to have access to housing. at decent prices, points out Gabrielle Guimond, of the National Coalition for Social Pricing in Transportation. The increase in the price of gasoline has a catastrophic impact on the overall budget of individuals and families who have no other option than the car. »
This organization advocates for governments to take this issue into account in their housing strategies.
The price of gasoline also affects the price of goods. The additional fees that trucking companies impose on their customers to offset the rising cost of fuel have been increasing for several weeks, according to the Quebec Trucking Association (ACQ). For example, charges of 62.3% were charged last week on full loads in Quebec and Ontario, according to the ACQ benchmark.
According to the President and CEO of the ACQ, Marc Cadieux, the bill is already beginning to be passed on to consumers. This is also what the CEO of Manufacturers and Exporters of Quebec, Véronique Proulx, observes. “The sum of the supply chain disruptions is making it increasingly difficult for manufacturers, and the price of gasoline is adding to the increased costs,” she says.
What goes up comes down (but not so fast)
Obviously, this is not the first sudden gas price hike for Quebec motorists. As in the past, he will have to resign himself to seeing the prices at the pump rise at least as quickly as those of the barrel on the world markets. And as before, when the oil goes down, the price of the ordinary liter will also end up decreasing… but not as quickly as it will have climbed, warns HEC Montreal professor Pierre-Olivier Pineau.
“Consumers aren’t fooled when they feel the rise is more sudden than the fall,” he says. This is partly the effect of weak competition between service stations. They will raise their prices as soon as costs rise, but will generally keep prices high until competitors lower theirs. Ontario oil analyst Roger McKnight adds that pump prices in eastern Canada are falling about 24 hours after a change in prices on the wholesale market. “Wholesale pricing is established in New York at 3 p.m. and takes effect at midnight the following night. Then you have to wait 24 hours to see the service stations adapt,” he says.
In other words, motorists who are able to wait a little longer between visits to the pump will not only consume less fuel – which is good for everyone – but they will also pay less to refuel.
Solutions ?
What are the other solutions to preserve the citizens’ budget? Some call for a reduction in consumption taxes and others propose the elimination of fuel taxes. But according to our columnist Gérard Bérubé, such a reduction rarely stays in the pockets of consumers.
For its part, CAA-Quebec recommends that motorists adopt eco-driving, which consists of accelerating gently and driving more slowly and at a constant speed. The organization also suggests “ensure the optimal maintenance of your vehicle”, since “a poorly maintained car can burn up to 25% more gasoline”. Another tip: consider buying an electric or hybrid vehicle, even if it’s hard to find such a model for immediate delivery.
For his part, the vice-president of strategic development of the car-sharing service Communauto believes that this crisis will push citizens to reassess their lifestyle. Their subscribers have increased by 30% this year, specifies Marco Viviani, who expects this progression to continue.
This text is taken from our newsletter “The mail of the economy” of March 14, 2022. To subscribe, click here.