See-saw gas prices undermine independent stations: McTeague
Published Tuesday, February 19, 2013 5:17PM EST
The fluctuating price at Ottawa gas pumps Tuesday could very well be a strategy by large companies to hurt independents, according to gas guru and former Member of Parliament Dan McTeague.
“It may be predatory pricing,” said McTeague. “I’m very concerned about the troubling aspect of this; and that’s prices are well below what is economically possible for gas stations to sell gas prices at.”
By McTeague’s calculations, the gas should be costing companies about $1.25 per litre after taxes. In Ottawa, many prices have dipped to $1.22. He says, it is not a price many independent gas stations can afford to offer. And taking them out of business would mean eliminating competition.
“What looks like a gas war may actually be a veiled attempt by large major oil companies to undermine a lot of independents in the region,” said McTeague.
Still, the dip comes as a relief to frustrated drivers who have seen prices soar over the past few months.
“"I remember when I started driving ten years ago it was 45 cents," said Ottawa driver Ben Gosselin.
Gosselin is just one of the thousands who have noticed see-saw prices throughout the day Tuesday.
"On the way to work it was 7 cents higher, I'm coming back now and I'm noticing it is back down to where it was yesterday," said Gosselin.
When CTV hit the road to investigate, they noticed the same thing. A Petro-Canada gas station in the east end was selling regular gas at 130.2 per litre just before noon. An hour later it was down to 122.4 per litre of regular.
McTeague said it is not a good thing for consumers in the long run.
“Toronto’s the best example: independents were pushed out of the market by their large suppliers who competed against them with these below cost selling strategies and as a result we have locked that pricing in Toronto,” said McTeague.
He also added that in the short-term for Ottawa, companies will try to make up the difference very soon. McTeague said Wednesday and Thursday could jump back up to the $1.30 per litre range.
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