Despite supply of fuel being at an all time high for this time of year – according to the US Weekly Petroleum Status Report – most of you will face a near two cent per litre increase at the pumps this weekend. This has nothing to with economic fundamentals and everything to do with market manipulation through over-the-counter, non-regulated energy trading platforms. For more information on this please see the blog post from March 19^th. Hopefully, Ottawa will soon clue in and join with other G8/G20 nations to limit this punitive speculation. We are, after all, hosting the economic summit this year. Why is this not a priority?

Tomorrow’s Gas Price Today Team

Recently announced federal legislation to protect consumers from faulty or tampered gas pumps misses a much larger culprit behind consumers not receiving the full amount of gasoline they purchase.

Anyone familiar with the retail gasoline industry knows that it is very difficult to tamper with a pump’s measurement mechanism. As well, even the Minister of Industry noted that 94% of the pumps tested by inspectors work just fine. Of the 6% of the pumps that didn’t indicate the true amount of gasoline being delivered, 2% erred in favour of the consumer. Most gasoline retailers would also not want to deliberately tamper with their pumps as it would prevent a reconciliation of their gasoline inventories and, were it discovered, would seriously hurt their business reputation. Thus, most retailers regularly check their pump calibration because it is simply in their best interest to do so.

On another issue, the government should work to provide more resources and staff for Measurement Canada – as the Americans do. It should also insist that pump inspectors be well-trained and personally certified to conduct proper inspections, not just certify the companies the inspectors work for!
 The most glaring defect in the proposed legislation is that it does not improve the pump inspection process. The test to determine the amount of fuel delivered by a pump is subject to automatic temperature compensation (ATC). As many consumers know, all gas pumps in Canada have an ATC setting of 15 degrees Celsius. That setting is not an accurate reflection of the ambient temperature across Canada. As such, pump tests done in an open environment cannot provide an accurate reading on the amount of gas being delivered by the pump. In the United States, ATC considerations are included in the testing process. If the government fails to address the improper testing procedure on gasoline pumps, consumers will continue to run the risk of not getting what they pay for.

Jane Savage, President and CEO of the Canadian Independent Petroleum Marketers Association, states that the proposed legislation does not address the core issue of a flawed system for testing pumps that can be affected by cold temperatures. She questions what scientific investigation has been done on the ATC issue by Measurement Canada? Rather than blaming retailers for faulty or tampered gas pumps, Ms. Savage asks that the government work on understanding the root cause behind the skewed data being produced on pump accuracy and the amount of gasoline delivered to consumers.  Ms. Savage should know something about pump fairness and the retail gas industry, her organization represents about 22% of the country’s independent gas stations.

A recent article in the Wall Street Journal titled, “Drill Now? Try Regulate Now“  notes the handwringing and, in some cases, cheering for our dollar reaching parity with the US.  Alarmingly, this development is seen as “good for consumers” when in reality it is not.

This site will try to help you better understand what lies behind the appreciation of our dollar value is in fact an unjustified and unwarranted hyper valuation of energy costs. Unfortunately, it takes the Wall Street Journal to tell a story that most commentators in Canada refuse to acknowledge or are oblivious to, which is a problem we have highlighted for over two years now. No one likes to be ripped off but at least we’re well informed.

Tomorrow’s Gas Price Today Team