Thursday, November 22, 2007

Quebec Gas Legislation

Clearly, the wrong sort of economists are inside the Quebec government:
The Quebec government has moved to force oil companies to justify gasoline and diesel fuel price increases, causing the industry to fume that it could be forced to file thousands of reports a week.

Now, it's not government's role to dictate what prices an entrepreneur or firm wants to charge. This, sadly, is not the irritating part. I apologize for the libertarian bent. Let me zoom in on what Quebec's Minister for Natural Resources is saying:
"We want to be able to identify if it's always the same company or the same service stations that trigger the price increases," Mr. Béchard said. "If on a Friday afternoon there is a price increase that is more or less justified we will be able to go and see where the movement started from."
...
"At the request of the energy board, if, for whatever reason, there are price hikes that are unjustified in a certain region, the minister can directly by decree determine the maximum sales price," Mr. Béchard explained.

Of course, the fact that such things as 'unjustified prices' do not exist has not stopped this populist. Further, does anyone think that their is widescale collusion among service stations? If there is, that's a job for the Competition Bureau, not price controls. Finally;
"At the request of the energy board, if, for whatever reason, there are price hikes that are unjustified in a certain region, the minister can directly by decree determine the maximum sales price," Mr. Béchard explained.

Notwithstanding the fact, of course, that their are very excellent reasons for disparity in gas prices between different parts of the province. Let's hope this legislation dies in short order.

POSTSCRIPT: This is obviously, to some degree, the pot calling the kettle black because Newfoundland has a regulatory board for gas prices - though at least that board contains a number of gasoline representatives, and is generally not a very binding constraint, from what I hear.

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