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Gas Prices Put Damper on Weekend Plans As Oil Companies on the Defensive

Posted on: Thursday, 1 September 2005, 18:00 CDT

TORONTO (CP) - Drivers groaned and politicians weighed in as oil companies found themselves on the defensive for a second straight day Thursday as the price of gasoline hovered at nose-bleed levels.

Grumbling consumers tried to make sense of the wild gyrations in pump prices that soared into the $1.30-a-litre range in several cities. Some Canadians went so far as to change their driving plans ahead of the last long weekend of the summer. Analysts blamed the jump in retail gas prices on a surge in wholesale prices in the United States, where numerous refineries in the South were shut down by hurricane Katrina at a time when supply was already tight.

That explanation didn't wash with motorists, politicians and others.

"They might have gotten hit with a hurricane in the States but we're being hit with a hurricane of greed," said Ken Georgetti, president of the Canadian Labour Congress.

"This is amazing the way they're gouging consumers."

One man in British Columbia made his feelings known by staging a personal protest on Highway 97.

Standing across the street from an Esso station, he brandished a large sign that read: Boycott Shell and Esso.

For 16-year-old Elizabeth Halpin, the steep cost of gas scuttled plans for a six-or seven-hour drive from the Ontario town of Stratford to visit friends.

"There's no way," she said. "It's too expensive."

In Fredericton, Penny Bubar, said she would also be driving less.

"I'll be staying home as much as I can," Bubar said.

Phyl Duggan, office manager at the Recreational Vehicle Owners Association of B.C., said RV owners would still be using their gas-loving vehicles this weekend, but they wouldn't be going far.

"That's just the nature of the beast: You're not going to have this $200,000 sitting in your driveway doing nothing," Duggan said from Abbotsford, B.C.

"(But) they're sticking closer to home."

In Cole Harbour just outside Halifax where prices hovered close to $1.30 a litre, Mike Chase fumed as he limited himself to $40 of regular gas for his Santa Fe SUV as he prepared for a weekend camping trip with his wife and children.

"It's crazy," he said. "It's hurting quite a bit."

But across the country in Vancouver, where prices were around $1.15 a litre, Melanie Osmack said she chose to live close to where she works so avoid long commutes.

"I've purposely made lifestyle choices so that I don't have to drive as much," said Osmack.

Wide price variations could be seen at pumps across the country Thursday.

In New Brunswick, motorists in towns near the U.S. border were paying close to $1.40.

In Calgary, the price was under 95 cents a litre.

The wild swings that both upset and puzzle drivers have to do with the fierce competition among gas stations, said Petro-Canada spokesman Jon Hamilton.

"There's a lot of pressure on retailers, even though margins are razor-thin, to try to reduce the price to bring customers onto their site," Hamilton said.

"Then you find one retailer just waves the white flag and prices start to restore."

Hamilton acknowledged the unhappiness among the driving public.

"Convincing people that they should be happy paying $1.25 per litre isn't a realistic objective," Hamilton said from Mississauga, Ont.

"But what we can do is provide information. (We're) working to put some information on our Internet site now just on what's been going on recently."

Toronto-area Liberal MP Dan McTeague called on Ottawa to legislate "more competition" in an industry that had opted to "take advantage of a very desperate situation."

Industry spokesman Dane Baily accused McTeague of political grandstanding.

Katrina, he said, wiped out 10 per cent of the refining capacity in the U.S.

"It's similar to shutting down every refinery in Canada," Baily, vice-president of the Canadian Petroleum Products Institute, said from Ottawa.

"What do you think would happen to the price of gasoline in Canada if every refinery shut down?"

Even though Canadian supplies weren't affected, Calgary-based analyst Michael Ervin said prices in this country have to rise in tandem with U.S. prices to avoid a massive outflow of gasoline south of the border.

In the Toronto-area, for example, the wholesale price rose 15.2 cents a litre on Wednesday and another 6.8 cents on Thursday.

Jane Savage, president of Canadian Independent Petroleum Marketers Association, also blamed a lack of competition in part for the sharply higher pump prices.

"At the wholesale level, we have only the majors," said Savage.

"Every single company moved exactly the same . . . keeping in mind, too, of course their costs didn't change."

In Montreal, Frederic Quintal, head of a Quebec group dedicated to fair gas prices, said Premier Jean Charest should regulate the price of gasoline in the province.

The high prices are "an artificial crisis because it's only speculation on the financial markets," said Quintal, head of Essence a juste prix.

But Charest said his government couldn't do much.

"The fact of the matter is the price of oil is what it is for the whole world," Charest said.

Ontario Premier Dalton McGuinty said there was little his government could do to help motorists, but opposition New Democrat Gilles Bisson, who called for a temporary price cap on gas, blasted that position.

"I don't buy it, voters don't buy it (and) people who have got to fill up every day certainly don't buy it," said Bisson.

In Edmonton, Conservative Leader Stephen Harper used the consumer anger to push his party's opposition to the Kyoto agreement on cutting greenhouse gases.

"The Liberals and the NDP have a long-term agenda to keep the price of oil and gas as high as possible because of their Kyoto policy," Harper said.

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Some prices for a litre of regular gas across Canada Thursday.

Charlottetown: $1.11

Fredericton: $1.29

Halifax: $1.28

Woodstock, N.B.: $1.30

Toronto: $1.23

Edmonton: $1.15

Calgary: $0.95

Vancouver: $1.16

Source: Canadian Press

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