Mr. Speaker, with respect to the hon. member's previous suggestion, the issue of petroleum product pricing is a regular agenda item at the federal-provincial-territorial meetings of energy ministers. Natural Resources Canada officials also maintain an ongoing consultation with their provincial colleagues on issues relating to petroleum product markets.
The increases in crude oil prices are the result of increasing world oil demand, due largely to economic recovery in Asia and production restraint by the Organization of Petroleum Exporting Countries, also know as OPEC.
OPEC members agreed to increase production at the OPEC ministerial meeting in March. This should ease some of the pressures, although not entirely, due to the demand for fuel and the status of inventories.
The inventory situation is one that should improve somewhat over the year. Reduced inventory levels throughout North America since last summer have kept prices high on spot markets. However, in the early part of 2000 the increased demand for distillates, diesel and furnace oil resulted in price spikes to record levels in certain centres in Canada.
This situation was the result of additional heating demand due to frigid weather and the North American and European refineries purchasing large volumes of low sulphur distillate on the spot market to conform to environmental regulations that became effective January 1, 2000.
The federal and provincial governments have some shared responsibilities in relation to crude oil and petroleum product pricing. Prince Edward Island and Nova Scotia are the only two provinces which currently regulate retail gasoline prices. The provincial governments are responsible for the regulation of retail pricing. The federal government has the authority for competition law and policy and for international and interprovincial trade.
When the federal government regulated crude oil prices during the 1970s and 1980s it was in response to very large and persistent price increases. Under the western accord of 1985 the governments of Canada, Alberta, Saskatchewan and British Columbia agreed that domestic crude oil prices should be deregulated.
The best option before us is to continue to defend primary reliance upon competitive markets to set prices, even as we work with other members of the International Energy Agency to promote oil market stability.