Oil exec peeved by gas taxes - 40% of retail price. Imperial Oil's boss defends cost at pump

www.canada.com JAMES STEVENSON Wednesday, February 26, 2003

Canadians enjoy some of the lowest gasoline prices in the world and if blame is to be assessed for rising prices they should look at government taxes at the pumps, Imperial Oil president Tim Hearn said yesterday.

Hearn said Canadian pump prices - which averaged 82 cents a litre last week - can be directly connected to international events such as the continuing troubles in major oil producer Venezuela and prolonged war clouds over Iraq. A particularly cold winter on North America's east coast has also boosted demand and kept crude prices sky high.

"Just take the tax out and take a look at how Canada compares to the U.S. today," Hearn said in an interview. "And everybody says the U.S. has the lowest prices in the world."

Taxes account for almost 40 per cent of the cost of gasoline at Canadian retail stations. Imperial is Canada's largest oil producer, operates the national Esso brand of 2,500 service stations and is 70 per cent owned by global energy giant ExxonMobil.

Hearn said the real price of gasoline has gone down in the past two or three decades, while provincial and federal taxes have risen by more than twice the rate of inflation.

"I guess you can never avoid the politics of mischief."

Last week the federal industry committee demanded to hear from Canada's top oil executives on the recent surge in oil prices, which hit Canadians both at the pumps and through home heating oil.

The high price of fuel prompted MPs from all political parties to accuse Canada's big energy companies of collusion and price-gouging. But Hearn said the energy market in Canada is "as efficient" as any country in the world.