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The committee heard from over a thousand people during its deliberations and is satisfied it has met its objective of acquiring a detailed understanding of the downstream petroleum industry. The Committee is also satisfied it has obtained sufficient information to issue an informative and constructive report. It is hoped that this report will assist efforts to improve Canada's oil industry and provide Canadians with a better understanding of how the industry operates and how it process its retail gasoline products.
The Committee examined factors it believes are crucial to understanding the industry and its gasoline pricing methodologies. Many of theses factors have a common association with one component that is intrinsic to how the industry operates and how pump prices are set. That common link is competition. While a number of factors play a role in pricing, their importance, like with pricing itself, is affected in large part by the amount of true competition that exists in the industry in any given region of Canada.
The Committee believes that federal and provincial governments must be more pro-active in protecting and enhancing true competition in the oil industry. Governments must ensure that the industry operates on a level playing field and within the laws that govern the ways business is conducted. If, as the Committee found, our existing laws are incapable of affording adequate protection, then they must be amended.
Governments have to address anti-competitive activities that occur in the oil industry. These acts are not in the best interest of consumers or industry participants. The oil industry itself has a responsibility to the consumer public to ensure that the price at the pump is indeed a fair price and reflective of a truly competitive marketplace.
There are several items that have an indirect impact on gasoline pricing. While further displaying the intricate and complex nature of the industry, some of these items can be used as positive catalysts for industry improvement and benefit consumers. This can be seen for example with the Committee's recommendation concerning Automatic Temperature Compensation.
The recommendations in this report were not designed to merely reflect the views of those who came before the Committee. There was a much larger obligation to bring forward practical recommendations to improve the industry and develop a market that would provide Canadians with a product they need at a reasonable price.
The Committee is very aware that Canadians want access to reasonably priced gasoline from an industry that is truly competitive. It is to these goals that this report is dedicated.
ESTABLISHMENT OF THE COMMITTEE
During the summer of 1997, Canadians witnessed sudden and significant increase in the retail price of gasoline. By September, consumer frustration over extraordinary and synchronous prices, along with their questions as to why these price hikes were occurring and being maintained, led to the creation of the Liberal Committee on Gasoline Pricing in Canada.
Comprised of Liberal Members of Parliament, the Committee responded to the concerns of consumers by undertaking a detailed examination of the oil industry with particular attention focusing on retail gasoline pricing. Central to the Committee's study was the question as to whether retail prices are set by market forces and industry conditions, or are the result of other factors, including those aimed at controlling prices and lessening competition- with both being detrimental to the industry and to consumers alike.
MANDATE OF THE COMMITTEE
The mandate of the Committee was to examine all aspects of the oil industry that have an impact on the pricing of retail gasoline in Canada. The committee studied a variety issues such as refining; marketing; wholesale and retail selling; access to supply; federal and provincial legislation relating to the industry; taxation; and any other factor that would permit the Committee to obtain a concise view as to how gasoline prices are set.
In order to acquire a comprehensive study and obtain the views of Canadians and the players in the oil industry, the Committee conducted a series of public meetings in Ottawa and in other parts of the country. Over the course of its extensive deliberations, the Committee heard from industry representatives, consumer groups, government officials and individual Canadians. The findings of the Committee, along with its recommendations, are provided in this report.