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Quebec gas companies charged with price fixing

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CTV.ca News Staff

Date: Thu. Jun. 12 2008 8:22 PM ET

Gasoline retailers in four Quebec regions have been accused of price fixing, the federal Competition Bureau announced Thursday.

The alleged scheme involved 13 people and 11 companies in the Quebec regions of Sherbrooke, Magog, Victoriaville and Thetford Mines, Commissioner of Competition Sheridan Scott told reporters at a Montreal news conference.

Three companies -- Les Pétroles Therrien (operating under the name Petro-T), Distributions Pétrolières Therrien and Ultramar -- pleaded guilty Thursday in Quebec Superior Court in Victoriaville. The court handed out fines totalling more than $2 million to the three companies.

Former Ultramar employee Jacques Ouellet also pleaded guilty and was fined $50,000.

The investigation began two years ago.

"Gas retailers phoned each other to agree on the price they would charge customers for gasoline," Scott said. "An overwhelming majority of retailers (in those regions) participated."

Ultramar is the only major oil company implicated in the investigation. Many of the others were local franchisees operating under the Esso and Shell brands.

Scott said there is no evidence Ultramar's head office was directly involved in the scheme, which cost the company a $1.85-million fine.

"This is obviously a regrettable situation that we deplore,'' Christian Houle, an Ultramar vice-president, said in a statement posted on the company's website. "We believe these employees did not mean to cause harm but acted out of carelessness without taking into consideration established rules and consequences of their actions."

Houle said Ultramar chose to plead guilty to avoid a long and costly trial.

The company's fine was one of the largest the Competition Bureau has ever handed out for price fixing, Scott said.

Scott said price fixing remains illegal and that her organization plans to take action whenever possible to expose the practice.

"Price fixing is a fraud against consumers," she said. "Price fixing deprives Canadians of the benefit of competition."

In some regions of Quebec, gas is selling for as much as $1.51 per litre.

Wiretaps, searches and testimony were used as evidence in the case.

An investigation into potential price-fixing in the retail gasoline market continues in other markets in Canada. According to Liberal MP Dan McTeague, a vigilant observer of gas prices, smaller cities are more likely to see this sort of conspiracy because it's easier to coordinate a small group of retailers.

"In smaller markets, you can imagine 15 or 16 stations might have 60 per cent of the market," he told CTV Newsnet on Thursday.

With files from The Canadian Press

Comments are now closed for this story

gord
said

Only in Quebec?


Mike Webster
said

Clearly this is something that happens all the time. Do they honestly expect us to believe that its a coincidence when all the stations suddenly decide to change their prices by precisely the same amout at the same time? I'm glad that the government has finally managed to nail some of these crooks. We've been getting gouged for far too long. Let's hope that more investigations and more charges will follow.


Keith
said

I suspect this is just the thin edge of the wedge...

Many Canadians have long been convinced this is a widespread practice.


Ken
said

Surprised? No, but I think that the problem stems deeper than just at the retail level.


John
said

I believe this is going on all across Canada. It's good that someone got fined. Hopefully more people will be convicted.


Jason Daniel Baker
said

A few scapegoats for a hated but rampant practice get thrown to the lions.

I bet they'll say they didn't even know what they were doing was illegal.


Wake Up People
said

Well, at least start from Canada and we may find some others for price gouging at gas pumps.

Jim


Fredh in Montreal
said

Sooo surprised...


Jim
said

Good. It's about time. Let's see some action in Ontario too.


RRor
said

This is a good start, now go after companies in the rest of Canada.


Ken
said

Just goes to show that the current price of gas is fixed by GREED, and not supply and demand. Even the Saudis, one of the biggest oil exporters in the world, have stated the the current price per barrel is WELL ABOVE what it should be.


WK
said

I find this funny, not a few days ago there was a article on how the gas stations weren't making money only 5-6 cents a liter. I did some homework and found that some of the stations here where I live in BC pump 5,000 to 10,000 liters A DAY that is
$3000 - $6000 a day I'm sure you all can do the rest of the math...The point is WE ARE ALL BEING GOUGED


Ian.
said

This barely counts as 'action' in the first place. These companies make SO much money that any fine just bounces right off of them.

If you want to make it really hurt for these companies, then make it illegal for them to raise the price of gasoline for a set duration. Make -them- feel the pinch of the rising cost of oil .... these guys haven't EVER had a money-losing year in their entire existence.

Make them hurt. Just once.


Don
said

How is it that every gas station in Prince George went up within about an hour today to exactly the same price. Someone is talking to someone.


Beaj
said

Hello....
Not a surprise to the consumer we believe this happens everywhere across our country....:)


Max
said

I gather this is supposed to make Canadians feel that the federal government is serious about punishing people and corporate enterprises that screw us. Thanks, Ottawa. I'm sure you're going to be charging the major gas retailers in the Toronto region soon. I can't wait. Right now I'm holding my breath. Even though I believe they've been price-fixing for years, I'm still holding my breath. ...Hurry...my face is turning red...


James
said

Hey Gord your "only in Quebec" comment ... I'm sure this is even going on to some degree out in oil country and even here in B.C. apparently 3% of gas stations across the country are engaging in price fixing.


GW
said

One comment refers to the 5 or 6 cents retailers make per litre, and then says that some stations are pumping up to 10,000 litres daily, and how this is thousands of dollars. Do the math. This is hundreds of dollars maybe, and that is before staff costs, taxes, etc. The local gas bar is lucky to break even, and without confectionery sales, they would not even do that. As far as the phone calls to fix prices, this has been illegal for years, these guys knew it, and they deserve to have the book thrown at them.


Marc
said

So will the competition bureau be stopping the never ending sale that is going on. We have been saving 3.5 cents off the advertised street price for over 3 years now. Why have a price advertised, when no one pays that price? What is a litre of gas worth, the advertised price or the price paid.


syl
said

can someone check the vancouver gas retailers? because we always have the most expensive gas around!!!!


Roony
said

Good.... about time.
Everyone who owns a vehicle knows the prices go up over night at all the gas stations everywhere. They caught them in Quebec, now do the same in the rest of the provinces....

Kevin Seymour
said

The oil companies are crying about not making any money, but an employee of one of them has stated that he only pays .44 per litre for diesel fuel for his
truck while we are paying 1.50 plus at the pumps. Who can justify this??


bob
said

WK,

10000 * .06 =600$ not 6000$.

I own a gas station and my margin is only .03$ per liter.
I sell about 14000L per day so about 400$ profit. after paying employees and electricity from pumps ect ect. I have nothing left. Groceries are my only profits with a 30% mark up.

cheers


Raoul
said

Poor WK,
Thought he/she was making an insightful comment by saying "I did some homework" and somehow deduced that 10000 litres per day multiplied by 6 cents/litre equals $6000. As GW pointed out, should have checked with a calculator before you posted.


GJ
said

Bob...

I wouldn't say ALL the stations/retailers are involved in this practice but the reality is quite a few are and not just in Quebec either. The federal and provincial governments won't do squat about the price of fuel because the higher it goes the more tax revenue they make. They're smiling all the way to the piggy bank and we all know it.


Max
said

To bob:
Let me first wipe my tear... I appreciate you sharing with us your plight. Goodness; I might not sleep tonight worrying about you.

It was interesting to note that, as a gas station owner/operator, you had absolutely nothing to say about the article and price-fixing.


Vince M
said

I have been in the US where two gas stations across the street from each other have different pricing.

One might be cash only and the other credit card. One is self serve and the other isn't. But the important thing was they priced for what they offered.

Why do we not have that degree of differentiated pricing here?




Charles
said

Any chance the Federal Competition Bureau could look at all the other provinces, since this is happening across the country?


Jim Flaherty
said

I don't dispute the fact that the end-retailer makes a small profit. The real issue is how the futures or speculator market goes up one day and the price goes up a the pumps the next day. That's where the real money is made. The market drops but it take a while to "work through the system". Nice. Regardless what anyone says, I'm firmly convinced that there is collusion in the petroleum industry...

dale worsfold
said

the real villains are not the station operators but the oil companies themselves.

you don't do exactly as the oil company demands or charge what they tell you to, they put you out of business and find another sucker.

having a background in the retail service station industry, i know this to be true. the oil companies could care less as long as they make their windfall profits


Jim Flaherty
said

Why is it that Canadian retailers don't show mid and premium fuel prices? That really annoys me. In some places there's now a 25 cent difference between the three grades.

And what about diesel? Why does it need to be 1.45+ per litre?




Brad
said

Have no illusions people. Here in Edmonton we have 3 (4?) refineries that sell gas to pretty much everyone. That is the level you have to look for price fixing at. Stations may tweek prices a little in the short term (more likely to keep prices up when it costs them less to buy it)...

connie
said

How stupid of us not to think that this is happening all over the whole country. There used to be price wars and we could save a penny or two per litre. Now everybody is charging the same price. Who decides what this price should be, and why does everybody else go along.


Les J
said

yeah, the high profits of selling gasoline would explain why Exxon announced today, that its SELLING all its retail stations, due to low profitability....

/sarcasm off

Kevin: Your friend that says he is getting diesel for 0.44 is full of bull excrement. At $130/bbl, the cost of diesel, just from the crude portion, is about 0.85. Add up to 0.4 for taxes, and 0.2 to 0.3 for refining costs, and we are at 1.4 to 1.5, just for costs.

And y'all should quit whining. At least quit until a carbon tax is introduced. Then we can see European prices; at 2 to 3 dollars/liter.


Lynn's broke now
said

What? Arrests or fines in Quebec? Retailers? Oh Come on, give me a break. Is this some sort of diversion? The price fixing goes on further up the ladder. If the retailer's mark up isn't that much than surely it doesn't take much to convince a retailer to turn a blind eye. The greed is becoming transparent. A joke. Vote with your feet folks!


Theorist
said

For those of you who have never worked in a gas station and are curious as to why all the stations seem to 'suspiciously' change their prices at the same time and increase ot the same amount...

When you work at a station, you receive a call that it's time to change the price. You then call into a national call center and an automated system quotes you the new price.

Obviously not the case in this situation, however that is how it works. Conspiracies only run so deep...


Peter
said

I'm really surprised after reading all the comments that not 1 person has even mentioned the the Gov't.
Yes, they may have caught some of the culprits and yes the gas companies are taking us to the cleaners, but are our Gov'ts reducing TAXES on gasoline? NO!


dusty b.
said

One of the things that I remember when leaded gas was going out of the gas stations, there were different articles from the oil companies and the one I have sticking out in my mind was the one oil producer telling the reporter that having undleaded gas for regular gas was going to cost a dollar a litre cheaper to produce!! Never seen that savings from the first day undleaded was introduced and did any of our mps cry foul? are they crying foul now of course not!!! (wouldn't want to see their $70 000 + per year salary have to actually work for their constituients!!!!!!!)


DD
said

It is strange that all the major stations sell their gas at the same price. I'm sure that competitive car dealers or grocery stores etc., don't sell the same product at the same price.


James
said

When I was going through college I worked at a gas station in Barrie, What we did to change the price was copy the station across the street and they copied the one further down the street. The whole south end at least had fixed prices. So no matter where you went it was the same and not because a call from head office, its because they didn't want to be above or below the competition. Unfair practices... you bet


Jasper
said

It's about time. Fine them hard. Hopefully some of the other crooks take note.

The competion bureau should look for price fixing in other major cities. It shouldn't be too hard. Just look for the highest prices. I can understand higher prices in remote locations where transportation costs are higher; but here in Sask we have 2 refineries and 3 more in Edmonton. Transportion costs to the oil companies shouldn't be an issue. They produce the fuel.




Chris C.
said

It's about &%$# time!!!!


Former Pump Jockey
said

Having worked for an oil company i know that this is not uncommon, where i live in the Maritimes the main refinery called all fuel stations and told them what to charge....hardly seems like competition and a fair market place to me


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