OIL and gas companies in British Columbia will be forced to reveal to consumers how gas prices are set, as a result of new legislation that was introduced on Monday, November 18.
The fuel price transparency act will allow the B.C. Utilities Commission (BCUC) to collect information from oil and gas companies on the market conditions involved in setting gasoline prices. This information will be made available to the public, as well as consumer and watchdog groups.
“It’s incredibly frustrating to watch the price of gas shoot up for no reason, and British Columbians are tired of feeling ripped off whenever they fill up their vehicles,” said Bruce Ralston, Minister of Jobs, Trade and Technology. “This legislation sends a message to oil and gas companies: the days of setting your prices in total secrecy have come to an end.”
The act was developed in response to the BCUC investigation that found a lack of competition and substantial markups in the province’s gasoline market, including a 10- to 13-cent-per-litre premium being charged to drivers that industry was unable to explain during the BCUC inquiry. This unexplained premium results in British Columbians paying an extra $490 million every year.
This act will require companies to share data on refined fuel imports and exports, fuel volumes at refineries and terminals, as well as wholesale and retail prices. It also has safeguards in place to ensure that the information provided by the companies is complete, accurate and reported regularly.
“By pulling back the curtain, these companies will be publicly accountable for unfair markups and cost increases that cannot be explained,” Ralston said. “It will also produce a common set of facts moving forward, allowing us to properly evaluate other policy measures to bring fairness to the price at the pump.”
Fuel Price Transparency Act
Bill 42, the Fuel Price Transparency Act (FPTA), proposes to establish a mandatory reporting framework for companies involved in supplying gasoline and diesel in British Columbia.
The FPTA will establish a regular schedule of reporting on the gasoline and diesel market, including: refined fuel imports and exports, including volume, source, destination and mode of transport; fuel volumes at refineries and terminals; and wholesale and retail prices. Companies will have to report their data and could face fines or administrative penalties if they fail to do so. The FPTA also sets rules for audits and inspections to ensure that the data being reported is complete and accurate.
Public reporting is a key element of the FPTA. The administrator of the act will be empowered to compile and disseminate information publicly. The FPTA also allows confidential information collected on the gasoline and diesel market to be made public, if the public benefit from the release of that information outweighs the harm to the business interests of fuel companies.
The release of information under the FPTA will encourage the competitiveness of the market in British Columbia and give the public confidence that the market is working fairly.