Evidence of meeting #1 for Subcommittee on Oil and Gas and Other Energy Prices in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was price.
A recording is available from Parliament.
12:05 p.m.
As an Individual
As Peter said, there's a world market for crude oil, there's a regional market for refining, and then there's a local market for retail. Each has its own dynamics. I think you're talking about the regional market for refining, which is either North American or, I would suggest, Atlantic basin. If the wholesale price in the gulf coast goes up, guess what? The wholesale price in Toronto is going to go up.
August 27th, 2008 / 12:05 p.m.
President, Canadian Petroleum Products Institute
At the wholesale level, we operate in essentially a continental market, and Canada represents a relatively small portion of that continental market. So for the most part we're price takers on wholesale gasoline. Today, the most recent numbers out of Natural Resources Canada show that on a national basis Canadian wholesale prices are within 1¢ of wholesale prices of the United States.
12:05 p.m.
Conservative
Colin Carrie Conservative Oshawa, ON
I'd like to give the last thoughts to our panellists.
We've heard today about speculators; we've heard about the price of crude, the price of gasoline; we've heard about refining margins and retail margins; and we've heard about the carbon tax. Basically, what is the one thing Canadian consumers need to know? What message do you want to get to them?
12:05 p.m.
President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association
For Canadians buying gasoline day in and day out, it is not the person who owns the gas station who's making the money. It is, recently anyway, the crude oil producer.
12:05 p.m.
As an Individual
It is an international market for oil and gasoline, a competitive market, and the Canadian consumer is well served by the marketplace.
12:05 p.m.
President, Canadian Petroleum Products Institute
We understand Canadians' frustration with fuel price volatility, but that's the best evidence of a well-functioning, competitive market. In our view, notwithstanding the volatility, Canadians are well served by a competitive marketplace, and today they still pay the second lowest price for fuel in the western world.
12:05 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Thank you.
I don't think it's the volatility of the price, but it's the high prices that are really bothering Canadians. I talk to a lot of seniors, for example, who are worried about keeping their homes over the winter because of heating costs. Each of you is saying it's someone else who is responsible for it, but one thing we know is that when crude prices go up—often for no reason pertaining to production—the industry makes windfall profits. It's nice to point fingers at others, and the industry may say it has no control over this, but coincidentally the oil industry makes huge profits when consumers are dinged at the pumps.
So my question to you is, why are the oil companies making such huge profits, if it's out of their hands that these prices are so high? Quite frankly, consumers don't buy it. They believe they're being gouged. Speculation is clearly part of this. We're going to deal with a panel on that this afternoon. People believe the oil companies are gouging them, and it's more than just a PR problem; it's a real concern for Canadians. We own huge supplies of oil in this country and, at the same time, we have the largest polluting project in the country, the tar sands, which are going to supply more oil. That's a huge concern for Canadians. Frankly, we have a problem with the way the oil industry is pricing the supply here and with the environmental impacts it is causing for all Canadians.
This is mainly a statement, but if you have any comments on it, I'd appreciate them.
12:10 p.m.
President and Chief Executive Officer, Canadian Independent Petroleum Marketers Association
I can start.
There's no question that there is a very strong correlation between price at the pump and oil industry profits—no question. The oil industry profits we're talking about relate fundamentally to the oil industry that's what we call the upstream. Call it pointing fingers if you like, but it is not the folks who are delivering fuel to Canadians all over rural parts of Canada who are making money—not that making money is necessarily evil. In fact, it's not evil at all; it's probably quite a good thing that people are making money. But having said that, it is without question the crude oil piece of this business, the upstream piece, that is making money. If your question really is who is making the money, it is the upstream, the crude oil production part of this business.
Why? I hope we've explained the various sectors, the crude oil piece of it, etc. That is fundamentally, yes, profits and gasoline prices, for example, and heating oil prices. We too are very concerned about the heating season coming up, when prices are going to be much higher than they were last year. For our customers it's going to be a very tough winter. We're as concerned as consumers, being just grown-up, great big consumers as independents. We are extremely concerned about it.
12:10 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you, Ms. Savage.
Thank you, Ms. Nash.
Thank you all. Thank you to the witnesses for being here. I know you've been on the hot seat for two hours. We appreciate your coming forward and addressing this very complicated and very serious topic.
Members, we will resume here at one o'clock. I ask you to be back in the room at about five minutes to one. We'll resume our afternoon session at one o'clock.
I declare this meeting adjourned.