It's important to understand the price dynamic and how prices are set. First of all, in terms of prices at the pump, we all know that the crude sector is important. We know that the price of crude oil has increased steadily for a number of months now, and even a number of years. The same applies to refinery margins.
However, retail margins in Montreal, for example, have remained relatively constant, at between 4¢ and 6¢. Indeed, we have a document here that you can take a look at, if you're interested. We are seeing that the price of crude oil has increased, that refinery margins have increased, and yet, retail margins have remained stable.
Why have refinery margins increased to such an extent? Well, it's important to look at what is going on in the United States. Prices set in Montreal reflect what is occurring in the United States. And, prices are set on the basis of what is going on there. Back in 1981, for example, in the United States, there were 189 companies operating 324 refineries, while in 2005, there were only 55 companies left and 148 refineries.
So, it is clear that market concentration has occurred. And, if we took an even closer look, we would see that the 15 largest companies in the United State control 85.3 per cent of the refining capacity. That concentration has a direct impact on refinery margins.
The fact is that an artificial shortage is being created because inventories of petroleum products are kept at very low levels—just enough to meet demand, but extremely tight in terms of supply. As soon as something happens, margins shoot up.