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Industry Minister Tony Clement arrives at a news conference on gas prices at a Toronto home on May 12, 2011. (Frank Gunn/The Canadian Press)
Industry Minister Tony Clement arrives at a news conference on gas prices at a Toronto home on May 12, 2011. (Frank Gunn/The Canadian Press)

Ottawa to grill gas-industry executives over soaring pump prices Add to ...

The re-elected Harper government has decided the best way to defuse the fury of car owners stuck with skyrocketing gas prices is to haul industry representatives before a committee for a tongue-lashing.

With gasoline selling for more than $1.40 cents a litre in parts of the country, Industry Minister Tony Clement said Thursday he plans to ask key industry executives to explain themselves before parliamentary hearings in Ottawa.

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If precedent is any guide - and such hearings are commonplace when gas prices soar - executives representing the refinery and retail sectors will be subjected to much verbal abuse from MPs channelling their constituents' anger.

But since past attempts have proven there is little that governments can do to force petroleum prices down without so badly distorting the market that the oil industry and the rest of the economy ultimately suffers, a day or two of verbal abuse is the most the executives are likely to be subjected to.

It is a prosaic beginning to the first Harper majority government. But since urban car commuters helped deliver that majority, a little political theatre is the least the Conservatives can offer those suffering at the pumps.

Mr. Clement sounded as tough as circumstances permitted on Thursday, hinting at further action by the Competition Bureau if the industry can't answer Canadians' "common sense" questions.

"I think it's very clear that for most Canadians, including this Canadian, that how they come about their pricing is not very transparent, it's opaque," he complained at a news conference held in the front yard of a suburban house in the north end of Toronto.

He wondered why, for example, the relationship between gas-station prices and global crude prices isn't constant or predictable. When the price of crude spiked to $140 a barrel last year, pump prices were lower than they are now, even though oil is roughly 40 per cent cheaper at $97 a barrel, Mr. Clement pointed out to reporters in Toronto.

"No one understands how that can happen," Mr. Clement said. "People deserve the answers to these questions."

There have also been unusually wild daily swings in recent months. The average price was $1.36 a litre in Toronto Thursday, five cents lower than a day before. In Vancouver, the price barely budged, dropping to $1.41 from $1.42 Wednesday; in Halifax, it edged up a fraction of a cent to $1.37 per litre. Perennially-high Montreal saw a two-cent drop to $1.43 following a seven-cent rise the previous day, while Calgary, which often records the lowest prices in the country, jumped from $1.27 to $1.29.

The Harper government is clearly anxious to get out in front of an issue that has oil companies ringing up massive profits at consumers' expense.

But quick action to provide relief appears remote. Indeed, by the time the hearings convene, the issue may already have disappeared, as prices come down or motorists resign themselves to the grim new normal.

Technically, Mr. Clement can't call hearings. That job belongs to the House of Commons Industry Committee, which won't be formed until Parliament reconvenes, likely at the end of the month.

New Democratic MP Jack Harris said he's "doubtful" hearings can be scheduled in the few weeks that Parliament will sit before the summer recess. And he said hearings aren't enough, calling on Mr. Clement to create a gas-price ombudsman to investigate anomalies, speculation and possible gouging.

The industry, which has grown accustomed to being called to account every time gas prices spike, argues that questions about gouging simply don't make sense.

"The industry is too big, too diverse, and has too many players to suggest that there's some magic way of being able to establish and fix prices across the country," said Ted Stoner, the western division vice-president for the Canadian Petroleum Products Institute, which represents Canada's refineries.

Mr. Stoner acknowledged oil companies have been pulling in "enormous profits." But, he said, much of that is coming from the sale and production of crude oil, rather than gasoline. Nor are gasoline prices only influenced by crude. Prices are also heavily influenced by the wholesale market for gasoline and local competition among gas retailers.

He also argued that any talk of a windfall profit tax should be accompanied by a pledge to help out oil companies when prices sink.

Still, the industry pledged to comply with Mr. Clement's request, and they look forward to clearing the air on the gas-price issue.

Individual petroleum companies said they have not yet been officially invited to Ottawa by the minister. "We'll certainly co-operate if asked," said Imperial Oil spokesman Jon Harding.

This isn't the first time that Ottawa has made noises about getting tough on the oil industry.

A similar price spike in the winter of 2003 prompted an earlier round of Parliamentary hearings. The committee ultimately found "no evidence" of an industry conspiracy to fix prices, attributing price rises to market factors. The committee did, however, urge the creation of Petroleum Monitoring Agency, a recommendation that was ignored.

The Competition Bureau has likewise conducted numerous investigations of retail price-fixing in recent years, finding only isolated regional cases of criminal behaviour. Major investigations in 2008 and 2010 resulted in charges against 38 individuals and 14 companies in four Quebec cities.

But the Bureau has found no evidence of price-gouging on a national scale. And top bureau officials have warned in the past that any attempt to control prices would trigger even higher prices for consumers.











On Thursday, Mr. Clement ducked questions about whether Ottawa would lower federal gas taxes to provide consumers with some immediate relief. Federal and provincial taxes account for 30 to 40 per cent of pump prices in Canada.



With a report from Nathan VanderKlippe in Calgary

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