Image Credit: The Canadian Press

By Mel Rothenburger

ARMCHAIR MAYOR

ROTHENBURGER: Gas-price report provides a few answers but no solutions

Sep 3, 2019 | 4:52 AM

KAMLOOPS — IT WAS IMPOSSIBLE not to notice that gas prices in Kamloops jumped by a dime just in time for the Labour Day long weekend. According to past wisdom, it was a coincidence.

Or was it? The closest thing to a coincidence might have been that the B.C. Utilities Commission report on B.C. gas pricing was released on the eve of the weekend. The 114-page report doesn’t make for easy reading but a few things stand out.

Number one is that we’re paying more than we should. No evidence of collusion, says the report, but the appearance of what it calls choreography. And it describes the competitive situation as an oligarchy.

In other words, though we’re paying the highest prices in North America we still don’t know exactly why.

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So, what to do about it? What about price controls and the Trans Mountain expansion?

The report says regulating wholesale prices could reduce price volatility. But it advises caution, since the marketplace is usually a more effective regulator than government.

Regulating retail prices could minimize retail price variability over short periods of time but has a number of disadvantages. According to the commission, low-cost retailers like Costco would probably exit the market, competition might be lowered, and regulation itself costs money.

As for the Trans Mountain pipeline, will the expansion bring down prices at the pump? Possibly, but some of the increased TMX capacity would need to be reserved for the B.C. gasoline and diesel market because there’s currently no guaranteed allocation.

By the way, the inquiry wasn’t allowed to look at the impact of taxes.

The commission recommends the public and industry be given a month to respond to the report. Surely the government must approve the extension.

Meanwhile, the mystery continues.

I’m Mel Rothenburger, the Armchair Mayor.

Mel Rothenburger is a former mayor of Kamloops and newspaper editor. He publishes the ArmchairMayor.ca opinion website, and is a director on the Thompson-Nicola Regional District board. He can be reached at mrothenburger@armchairmayor.ca.

Editor’s Note: This opinion piece reflects the views of its author, and does not necessarily represent the views of CFJC Today or the Jim Pattison Broadcast Group.