Is it time for Newfoundland and Labrador to stop regulating gas prices?
A new report says regulation of gas prices in Newfoundland and Labrador has cost consumers an extra $63 million since 2001.
The study, called Reconsidering Gasoline Price-Fixing for Atlantic Canada, was done over a seven-year period by the Atlantic Institute for Market Studies (AIMS). It looked at regulation of gas prices in the four Atlantic provinces over different periods of time.
The report concluded that in an effort to stabilize prices over the last 16 years, the Public Utilities Board (PUB) changed prices in a way that has taken $63 million out of the pockets of consumers that would have not been spent if the prices had been allowed to fluctuate.
According to Marco Navarro-Génie, AIMS president and CEO, that raises the question as to whether or not regulating gas prices is necessary.
"Consumers need to ask themselves the question, is stability, whatever that means, worth the amount of money that they're paying on an already overtaxed commodity?" he told the St. John's Morning Show.
"That's an answer that each consumer needs to answer for himself or herself. Whether that kind of intervention is worth the money that is being taken out of their pockets."
Well intentioned, but needless
In the report, Navarro-Génie writes that governments are often well intentioned when trying to control fluctuations in gas prices, but he hopes the study will make people question if it's perhaps better to endure extreme ups and downs in the interest of saving money in the long run.
While $62 million over 16 years and across millions of transactions isn't much money per litre, Navarro-Génie said it's significant given that gasoline is already the most taxed commodity, with several provincial and federal taxes already driving the price up even before regulations are put on it.
"In keeping with the necessity to favour policies that develop greater entrepreneurship, we should rely on free market devices when feasible. This is one such case," he wrote in the report.
"The four Atlantic provinces should abolish their respective gasoline price regulation."
The PUB said it is aware of the report, but has no comment.
