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The Montreal Gazette: Why did oil companies start collecting so soon?

Sunday 14 January 2007
Page 16

Before Quebec has even imposed its new “green tax,” oil companies stand accused of slapping a surtax on their clients, charging an extra 1.3 cents a litre for gasoline since Jan. 1. Talk about jumping the gun.

A law passed in December envisions passing along to the oil industry part of the cost of implementing the government’s “green plan.” But this surcharge has not yet come into effect.

But this week, a Montreal woman, Catherine Savoie, alleged in court that four companies have colluded illegally to bump up gas prices so they would not be caught short whenever the government does impose the surcharge.

Savoie is seeking permission to launch a class-action lawsuit against Petro Canada, Shell Canada, Ultramar and Imperial Oil, on behalf of all Quebec motorists. If her suit gets the goahead, it will seek $100 in damages per motorist.

Savoie argues by hiking gas prices now, oil companies are bringing in an extra $5 million a week for themselves, until the province’s levy comes into effect sometime later this year.

Two weeks ago, Robert Théberge, vice-president of Imperial Oil, reportedly said the companies, which collectively enjoyed a $7-billion profit in 2006, were “protecting” themselves by introducing the 1.3-cent “margin.”

Last week, however, the story was different. Just hours before the companies were due at a meeting called by the government, Esso dropped its Quebec “rack price,” the price at which refineries sell gasoline to wholesalers.

And Shell dropped its rack price by 0.9 cents a litre in Quebec and raised it by 0.4 cents in Ontario. It is more usual, reports say, that prices in the two markets move in parallel. Théberge, after meeting Natural Resources Minister Pierre Corbeil on Wednesday, told media the price changes were a result of “market conditions.”

The confusion will have fuelled fears expressed last summer, when the green plan was introduced, that consumers, not oil companies, would end up paying the tax.

The goal of the green plan is to achieve 72 per cent of the Kyoto Protocol targets without the help of Ottawa. To finance its effort, Quebec is to set up a Green Fund, financed to the tune of $1.2 billion over six years by this tax. Premier Jean Charest assured consumers in June that the cost would not be passed along to them at the pump. But in December, he admitted the firms would pass along at least some of the cost.

In fact, it was absurd for the premier to try to dictate pricing policy to the companies, or to pretend some faceless corporate “they” could be made to pay. Consumers are smart enough to understand clearly who ultimately gets stuck with new taxes, however virtuous.

But if certain companies have arbitrarily pocketed a windfall, just because they have the power to do so, then they deserve to face the full power of consumer disgust, and of whatever legal recourse any citizen or group of citizens can find to apply.

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1 Comment on “The Montreal Gazette: Why did oil companies start collecting so soon?”

  1. #1 tim pellett
    on Jan 14th, 2007 at 08:57

    the earnings per litre for are up 1,09 cents a litre for 3/4 2006 over 2005 this from the big 4 this is on the marketing end this shows canadians were the gst deuction went

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