Gas prices flirt with year lows

By Ottawa Business Journal Staff Tue, May 6, 2003 8:00 AM EST

Gas prices in Ottawa flirted with their lowest level in more than year Monday even as the federal government decided against investigating recent price spikes.

In a report before the House of Commons industry committee, Competition Bureau chief Konrad Von Finckenstein said the run up in prices during the first three months of the year was consistent with the global situation and did not merit a formal investigation.

The report comes amid a fresh wave of allegations that Canadian gasoline producers conspire to fix gas prices.

According to Von Finckenstein, the spike in prices that peaked in mid-March accurately reflected events in motion around the world. He cited political troubles in oil exporter Venezuela, the build up to the U.S. invasion of Iraq and a severe winter across much of North America.

The Competition Bureau will only launch an investigation if it believes prices are being fixed or market players are attempting to illegally squeeze out competition. Von Finckenstein said he found no evidence of either.

In Ottawa, meanwhile, the price of regular unleaded gasoline fell below 58 cents on Monday, the lowest level since a brief flirtation with 52 cents in January 2002.

In the U.S., prices fell to the equivalent of about 60 cents last week. American consumers pay far fewer taxes on their gasoline.

The wholesale price of regular gas in Ottawa is about 60 cents a litre. Almost half of that price is federal and provincial tax.

In the first three months of this year, local motorists paid an average of 3.4 cents a litre more than the wholesale price.

Since mid-February the wholesale price has fallen by about 13 cents.

Spencer Knipping, an analyst with the Ontario energy ministry, believes wholesale prices will continue to fall over the next few weeks.