Mr. Speaker, it is interesting that this question has come up tonight, given that we will be discussing the subject all day tomorrow in the Bloc opposition motion on gas prices, which is also in the name of the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup.
The federal government does not control the price or distribution of most goods and services sold in Canada. This includes gasoline. Regulation of retail gasoline prices is under provincial jurisdiction. Where prices are not regulated, they are determined simply by market forces.
The issue of gasoline pricing has been studied numerous times. Since 1986, gas prices have been studied over 20 times. Since 1990, the Competition Bureau has conducted six investigations into allegations of collusion in the gasoline industry. It has consistently found no evidence to suggest that periodic price increases resulted from a conspiracy to limit competition in gasoline supply. Instead, it has always found that market forces, such as supply and demand and rising crude oil prices, caused the price spikes. In fact, after each increase, prices fell to normal levels.
The price of crude oil drives the prices of refined petroleum products. Canadians cannot escape the effects of this global market. We enjoy the benefits through our exports and we pay the world price for the energy we use.
As I mentioned, gasoline prices are largely determined by the effects of supply and demand forces on the price of crude oil, which has been rising due to cuts in production by OPEC.
In a free North American market, fluctuating prices at the pump show signs of a healthy competition among retailers. Consumers can and should take advantage of this competition to force retailers to keep their prices as low as possible. Factors like competition and the cost to transport the gasoline from the refining plant to retail centres also make a difference in the prices.
While there is an obvious link between recent retail increases and the record levels we are witnessing with crude oil prices, it is important to clarify the fact that the price of crude is not the only determinant for what Canadians pay at the pumps.
There are four principal components that make up the pump price. The first of these components is crude oil, the raw material from which gasoline is made. It accounts for about 42% of the retail price. Then there are taxes, federal, provincial, and in some cases municipal, which on average account for 32%. Third is the refining margin, the difference between the cost of the crude oil and the wholesale price of gasoline. This margin, which represents roughly 20% of the pump price, covers the cost of refining the crude oil and provides a profit for the refiner. Finally, we have the retail or the marketer margin which, in essence, is the difference between the wholesale price and the retail price of gasoline.
In actuality, the retail margin represents the smallest component, accounting for less than 5% of the pump price. The hon. member may be surprised to learn that the retailers' profit margin has actually been relatively stable at the 5¢ per litre range for the last three years.
A bit of context might be useful at this point. We have established that gasoline prices are driven by the principle of supply and demand. Our current situation is that we have factors impacting both sides of the equation.
Canadians cannot escape the realities of the global market. We enjoy the benefits through our exports and we pay the world price for the energy we use. With market forces at play, both supply and demand and speculation surrounding the 2006 hurricane season, it is realistic to expect that gasoline prices will continue to be volatile throughout the 2006 driving season.