Who sets the daily price at the pump?
Published Monday, May 21, 2018 4:38PM PDT
Last Updated Tuesday, May 22, 2018 4:49PM PDT
On Tuesday, we'll tell you the city where drivers are paying more per litre than anywhere else in B.C. once provincial taxes are factored out.
As drivers pay never-before-seen prices for their fuel, many that CTV asked don't understand how pricing works and why the prices fluctuate so often.
CTV Vancouver asked major gas retailers like Chevron, Petro Canada as well as smaller ones like Super Save Gas and Otter Co-op who's responsible for setting the daily price and why it changes so often. But none of them would comment for this story.
The Canadian Fuels Association suggested analyst Jason Parent, the vice president of the Kent Group.
Parent said stations are generally looking to see what others that compete with them are doing.
"So, what is the guy down the street doing?" he said.
SFU marketing professor Lindsay Meredith said that often entails driving around to monitor prices in the area.
"Or some station manager looks out his window and looks at the price down the street and calls his price into his war room and then they adjust so everybody matches everybody else's price," he said.
He said that can happen several times in a single day.
"It may not seem logical, but it's evidence of competitive behavior if they're moving quickly to try to remain competitive with the guys down the street," Parent explained.
Meredith said the Competition Bureau would say it's acceptable as long as station managers aren't sitting down and agreeing to fix the price.
But that doesn't mean everybody thinks it's fair.
"It might not be illegal, but maybe it should be," said Bruce Cran, president of the Canadian Consumers' Association.
He said gas retailers know there's no advantage to keeping prices low if they're immediately matched by their competitors. So they go back up in unison.
"There's obviously something completely wrong when all the marketing principles we've known over the years are being totally violated," Cran said.
He believes the margins on gas are larger than the retailers admit and he'd like Metro Vancouverites to demand greater price transparency.
"One of the problems we have in Canada is we're all so nice," he said, referring to how drivers keep filling up as prices continue to climb.
With a report from CTV Vancouver's Shannon Paterson