The Parti Québécois (PQ) proposes to temporarily limit the cost at the pump to $1.60 per litre, and that the price difference be borne by oil producers. However, this measure would be difficult to apply economically and would only support Quebecers’ dependence on oil, according to an expert.
Faced with the rise in the price of gas, which recently crossed the $2 per liter mark, PQ leader Paul St-Pierre Plamondon protested that the oil companies were reaping record profits, speaking of “robbery”.
“It is neither normal nor acceptable that 85% of the increase in the price at the pump go directly into the pockets of the oil companies and their refineries. Experts expect a liter of gasoline to exceed $2.20 shortly. There comes a time when you can no longer sit idly by, it takes a contingency plan,” he said in a statement on Sunday.
By bringing the price down to $1.60, the oil companies would find profit margins similar to the context of two years ago, indicated Mr. St-Pierre Plamondon in a telephone interview.
“And it was already gargantuan profit margins,” he said.
The PQ leader mentioned that this measure could apply at least for six months or a year in order to relieve the finances of several families in the short term. At the same time, the Régie de l’énergie would have the mandate to carry out an analysis to establish in the medium and long term what the reasonable price would be in the circumstances.
According to Mr. St-Pierre Plamondon, Quebec could draw inspiration from French law, which gives the possibility in a crisis situation of setting a ceiling by decree for six months, when it is shown that excessive profits have been recorded.
An “extremely populist argument”
Professor at HEC and holder of the Chair of Energy Sector Management, Pierre-Olivier Pineau, considers the PQ proposal as an “extremely populist argument”, which would represent neither good economic nor environmental policy.
According to him, gasoline distributors would have difficulty selling at such a price since they themselves have to obtain the petroleum product from refineries, which may also have difficulty reducing their costs.
“If we wanted to force the refineries to sell at this price, they would not be able to obtain low enough oil supplies [auprès des producteurs] to be able to refine oil in Quebec. We would therefore face gasoline shortages by wanting to maintain a lower price,” explained Mr. Pineau.
But in his eyes, the PQ proposal will mainly have the long-term effect of maintaining consumer dependence on oil.
“By paying less, they would be encouraged to maintain their bad habits as consumers of petroleum products for longer. […] Raising prices would actually be the right thing to do if we were really serious about the energy transition,” he said.
Mr. Pineau recommends instead overtaxing the exceptional profit margins of the oil companies, following the example of countries like Norway, and investing in the supply of public transport.
The PQ reiterated on Sunday the urgency of getting Quebec out of oil dependence, but accuses the Legault government of “sleeping on gas”.
“The vast majority of Quebecers are only asking for that, but there are no electric vehicles for sale. There are two years of waiting, and that is due to the government’s lack of ambition, which is currently setting the proportion of zero-emission vehicles (ZEV) that must be sold in Quebec at only 9.5%” , lamented Mr. St-Pierre Plamondon.
The PQ wants an increase in quotas to force manufacturers to increase the supply of ZEVs. He mentions that countries like France, Germany and Sweden have sales quotas ranging from 25% to 60%.
This article was produced with the financial support of the Meta Fellowships and The Canadian Press for News.