Quebec awarded an Ontario professor $90,000 to assess differences in gasoline prices and retailers' margins and find solutions to increase competition in the sector.
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Robert Clark, a professor at Queen's University in Kingston, Ontario and an associate professor at HEC Montréal, has been hired by the Ministry of Business, Innovation and Energy and must be ready to submit his report here at the end of February. This is a private contract for a maximum amount of $90,000.
Robert Clark, Professor at Queen's University and Associate Professor at HEC. Photo provided by Queen's University
The professor's mission is to study the gasoline market and attempt to explain significant price differences – sometimes 10 cents or more – between retailers, with a particular focus on gas station profit margins. Possible solutions are then recommended to ensure healthy competition in the industry.
“People are suffering”
Last week in Gaspé, Energy Minister Pierre Fitzgibbon said he had found that in certain regions such as Gaspésie and the Quebec region, retailers' margins appear to be higher than elsewhere in Quebec.
The minister then confirmed during a press conference that Mr Clark had discovered collusion in the petrol sector in the 2000s. “He was also the one who discovered in 2006 that there had been collusion between certain petrol companies […]so Mr. Clark will help us find out if we need to change something,” he said in comments reported by ICI Gaspésie–Îles-de-la-Madeleine.
Mr Fitzgibbon would particularly like to consider what changes could be made to the Energy Authority. “Is it the energy minister’s job to say, ‘We’ll set the margin per retailer’? I don't know if we'll get that far. We will wait for the report. Maybe we remove the minimum price? Maybe at some point there will no longer be a minimum price?,” he said.
“I think people are suffering. We see regions where margins are actually higher,” he added.
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A qualified expert
Robert Clark did not call Le Journal back. But the renowned economist Marcel Boyer has worked several times with the latter, whom he considers “very qualified” to carry out this mandate.
“He wrote several articles about gasoline prices and the Quebec gasoline cartel in the 2000s. He is someone who undoubtedly knows his way around the petrol sector,” he says.
At the time, Mr. Boyer was also the economist hired by the Competition Bureau to study the effects of the gasoline cartel on prices.
“At the time the government had wiretapped certain companies, but to show that there was an impact on prices required a very detailed analysis and it was I who testified in court. “Mr. Clark and his colleagues were also given access to certain data and drafted documents relating to this particular cartel,” he recalls.
In particular, Professor Clark has published academic articles on collusion in the food and pharmaceutical sectors in the United States and in the gasoline sector in Quebec.
A necessary investigation
Recall that in November, Minister Pierre Fitzgibbon, dissatisfied with the explanations of major gasoline retailers about unusually high fuel prices in Quebec, said he wanted to conduct his own investigation.
“We hired someone to come to work and look at every gasoline warehouse to better understand the dynamics that might be favorable for Quebec compared to others, meaning the price is high,” Le Journal told the Journal of the Economy last November, when he met with executives from four of the five largest fuel retailers in the Quebec region.
The bosses of Couche-Tard, Pétroles Cadeko, Harnois Énergie and Sobeys did not comment as they left the meeting, essentially content to look at the floor as they headed for the door.
– With Gabriel Côté
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