Those of you, who believe gas price fixing does exist, raise your hand. My guess is that the vast majority of you raised your hand. Clearly, you now have some hard evidence to support your fear. Not that there should be any doubt about gas price fixing when virtually all gas stations in local markets sell gas at the exact or close to the exact same price. Never mind taking into consideration the record profits of petroleum companies.
The Canadian Competition Bureau (CCB) uncovered a gas price fixing scheme in Victoriaville, Thetford Mines, Magog, and Sherbrooke; all located in the province of Quebec. In all, eleven companies and thirteen individuals have been charged. To date, three companies and one individual have pleaded guilty and have been assessed fines totaling just over million. The companies charged displayed the following banners: Shell, Petro-Canada Irving, Olco, Sonerco, Esso Irving, Ultramar, Petro-T, Irving and Esso. Please note that banners refer to the posted banner by the gasoline stations, not the specific oil companies.
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Canadian laws make it extremely difficult for a conviction to be obtained. The law that governs gas price fixing states there must be evidence that competitors have made an illegal agreement to set those prices. The fact that they all sell gas for the same price is not considered evidence.
The CCB receives numerous complaints about gas prices, and in March 2006 published a fact sheet on gas prices. Contained therein is the statement: "Retailers usually post their prices on large street-side signs. Since retailers know that the majority of consumers are very sensitive to price, gas stations often strive to meet or beat their competitors' posted rates. As a result, competing retailers frequently charge similar or identical prices." So it would appear that they felt there was some justification for similar or identical prices.
What is amazing is that those charged were so confident they would not be caught that they phoned each other and set the price they would charge customers for gasoline. Fortunately for the consumer, the CCB utilized the resources available to them under the law to catch these offenders. Resources included wire taps, searches and an immunity program for whistle blowers.
While I applaud the Canadian Competition Bureau for their actions in this case and for offering proof that gas prices are indeed sometimes fixed by retailers, I seriously doubt this will deter others from attempting to fix gas prices. Why? The profits are just too great.
Gas Price Fixing Uncovered in Canada Price
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