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Ontario Gas Price Fixing: Class-Action Lawsuit Targets Canadian Tire, Mr. Gas, Pioneer

Posted: 04/10/2012 5:22 pm Updated: 04/10/2012 5:25 pm

LONDON, Ont. -- A class-action lawsuit is seeking millions in damages for the alleged victims of a gas price-fixing scheme five years ago in eastern Ontario.

The suit stems from a Competition Bureau case that saw Canadian Tire (TSX:CTC) and others plead guilty last month to colluding to fix the price of gas sold in Kingston and Brockville.

In a notice of action filed with the court, Law firm Siskinds says it wants the pump operators to refund any profits from the scheme to consumers.

Competition Bureau investigators found that gas retailers, or their representatives, phoned each other and agreed on the price they would charge.

Pioneer Energy LP, Canadian Tire Corp., and Mr. Gas Ltd. pleaded guilty to price fixing between May and November 2007 and were fined a total of more than $2 million.

However, Siskinds it will continue to investigate and could amend the suit to expand the scope of the allegations to other gas stations, or for a longer period of time.

5 REASONS WHY WE PAY SO MUCH FOR GAS
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  • 1. Crude Oil Prices

    It starts with crude oil. Although Canada may produce more oil than it consumes, the country is at the mercy of global markets for the commodity. Increased Middle East instability, sparked by popular uprisings, has lead to concerns about supply. Better-than-expected economic growth, especially in developing nations such as China and India, has also increased demand. (AP Photo/Hasan Jamali)

  • 2. Refining Oil into Gas

    The next link in the supply chain is refining. In order to turn thick, black crude oil into useful products such as gasoline, diesel, heating oil and jet fuel, it must be sent through a mind-boggling array of pipes and tanks, heaters and condensers to sort the components of the substance from lightest to heaviest. This is a complex and costly process, and is paid for by what is known as the "crack spread," or refining margin. This represents the difference between prices fetched for the products produced, and the cost of crude oil inputs.. (AP File Photo)

  • 3. Transportation to Retailers

    Once the oil has been refined into gasoline, it must be transported to retail outlets across the country. This is accomplished through a network of 23 terminals - from St. John's to Nanaimo, B.C. -- forming the backbone of the distribution network. (AP Photo/Jessica Hill)

  • 4. Retail Mark-Up

    The retail mark-up averaged 7.6 cents per litre in April. This national average masks wide variation, from lows of 4.6 cents in Calgary up to highs of 25.8 cents in Whitehorse, according to Kent Marketing Services, an industry consulting group. (AP Photo/Orlin Wagner)

  • 5.Taxes at the Pump

    Emily Corbett of Mechanicville, N.Y., pump gas at a station in Mechanicville, on Wednesday, May 11, 2011. New York, Indiana, Illinois and New Hampshire are among the first states talking about temporarily suspending part or all of the state and local taxes that can add 14 cents to nearly 50 cents to a gallon of gas. (AP Photo/Mike Groll)

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HUFFPOST SUPER USER
Jeffery Cuneo
66 Fans
12:02 PM on 04/11/2012
Isn't Canadian Tire, Pioneer, and Mr. Gas the cheaper locations to purchase gas? They are certainly cheaper then their bigger rivals like esso, always by a cent or two... Which begs the question, sure they fixed the price of gas, but were they "fixing" it at a lower rate then what was being offered by Esso, Petro Canada?

If so, this whole story becomes a lot more interesting... and makes one wonder who launched the investigation... I mean, even if they were fixing the price, if that price was CHEAPER then what the big oil companies were offering, why would consumers... care?

I mean really, Pionner calls up Mr. Gas and says, "hey fred, Esso is charging 1.10 a litre, wanna set ours at 1.08?" and we the consumers get mad about this? Doesn't seem likely. More likely the big corporations targeting the smaller, cheaper, independents.
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ontariogirl
Peace!
762 Fans
09:06 AM on 04/11/2012
Price fixing has been going on for a long time. Remember the refinery fire. After that it went up and up and we paid and we paid. Since the industry got away with it then it has been like that ever since. I'm sure once this problem is fixed we will see a significant drop at the pumps. After that a giant rainbow will appear in the sky and we can all follow it to the pot of gold.
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HUFFPOST SUPER USER
Angus12
43 Fans
07:07 AM on 04/11/2012
Did anyone notice after the 5 cent price hike on Thursday before the long weekend that the price at the pumps went right back to were it was before the hike. Its gauging plain and simple and the government will do nothing to stop it.
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NTodd
Aude Sapere
297 Fans
01:57 AM on 04/11/2012
Your slideshow didn't include commodity market speculation in the absence of position limits. This was the genesis of the price spike in 2008, and inaction on this problem is the source of the problem today. Let's not be distracted: this is a serious problem that explains why we quickly rising prices despite lower demand and bulging reserves.
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firstcircle12
84 Fans
 
12:51 AM on 04/11/2012
Well it's a start. Now how about going after the big boys like Bell and Rogers for fixing internet/TV rates and the banks for fixing service charges and mortgage rates.
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BubbaHubbaJubba
23 Fans
10:11 PM on 04/10/2012
Canadian Tire's Punishment:
80% off their entire inventory for a full month.
Rain checks o.k.
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Terran
111 Fans
09:55 PM on 04/10/2012
it's happening all over the country - not just in kingston and brockville.
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Bumpers car
Fish till you die
60 Fans
08:37 PM on 04/10/2012
So the law firm wants the funds returned to consumers. How? I buy most of my fuel from the Pioneer in my village and have for the last 20 years. Maybe 20% is on a credit card, the rest is cash or debit. So what do they do, force the stations to reduce the fuel costs for a period of time? Take my word for it and give me a thousand or so or just donate an amount to some flavour of the week enviro project? The only one here who will see any financial compensation out of this is the law firm and the rest of us will just go on being stolen from. Money for lawyers.
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BubbaHubbaJubba
23 Fans
10:15 PM on 04/10/2012
Coincidentally I asked the same questions as I read the article.
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HUFFPOST SUPER USER
logicanada
Blogger, radio co-host, writer, editor, voice-over
1847 Fans
 
08:33 PM on 04/10/2012
What would happen if a price regulated pre-trading reserve were established in Canada for the benefit of canadian consumers?
Hmmm.
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sunnyokanagan
Increase compassion. Decrease suffering
155 Fans
09:00 PM on 04/10/2012
It would be squashed instantaneously because that would be contrary to International trade agreements.
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HUFFPOST SUPER USER
sdgreen
73 Fans
11:40 PM on 04/10/2012
How does OPEC get away with it then? Seems to me since we have the resource, we can do whatever we wish for our Canadian consumers. What happens to what we export is an entirely different matter.
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HUFFPOST SUPER USER
logicanada
Blogger, radio co-host, writer, editor, voice-over
1847 Fans
 
08:31 PM on 04/10/2012
Crappy Tire (and others) will get a fine for this in the amount of 0.000001 percent of the extra profits they made from fixing the prices.
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IranianDude
117 Fans
08:23 PM on 04/10/2012
Free market capitalism at its very best. CONs should be proud of their diseased mantra now ...
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HUFFPOST SUPER USER
sdgreen
73 Fans
08:06 PM on 04/10/2012
Frankly I think the entire fuel servicing industry is one gigantic price fixing scam. Fuel prices in Canada can be compared easily to that of a yo-yo on a regional basis. One never knows from one day to the next what the price might be, heck sometimes hourly.

One thing is for certain, the suppliers and government are making massive profits on petroleum products. Governments will not intervene because of the tax revenues accrued.

Somehow we have to get Canada off of the International oil market, establish our own internal supply need and price, then do the same thing for the stuff we export.
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cdnbystander
257 Fans
10:11 PM on 04/10/2012
Before any long weekend, look for gas prices to rise. Funny how that works out isn't it?
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ToxicSludge
58 Fans
07:31 PM on 04/10/2012
Canadian Tire gulity of price 'fixing.' Heck... I always thought Canadian Tire couldn't 'fix'anything.
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HUFFPOST SUPER USER
Leanne McKenzie
You can't make this sh*t up.
276 Fans
06:33 PM on 04/10/2012
Going after the little guys. How about Esso? Shell?
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HUFFPOST SUPER USER
rickthaluddite
What noisy cats are we
426 Fans
 
07:10 PM on 04/10/2012
Some of my family live in Arthur, Ontario. 3 stations on one corner-- Esso and Petro-Canada always have the same price, Pioneer is always 0.3 cents cheaper. Prices change at Esso and Petro-Can at the exact same time and Pioneer follows within a couple of hours. Collusion isn't even a question-- I've seen it in action since I started driving in 1983. Mount Forest 20 km north and Fergus 15 km south also have price fixing in their small markets.
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jimbo50
7 Fans
10:58 PM on 04/10/2012
Good point. In my city, Pioneer is always a little below the pump prices of the big boys. Why no mention of those gas retailers (Esso, Shell, Sunoco, and Petro-Canada)?
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MyTake
Release the Hydrogen Economy now!
409 Fans
06:29 PM on 04/10/2012
Ah, I hate to tell you that "price fixing" has been going on for an entire century when John D. Rockefeller garnered a 95% monopoly on OIL REFINING under the Standard Oil Corporation.

Rockefeller developed the plan to put crude on the Stock Market, sell it to a refinery and then the refinery's, after taking their profit, sell gasoline to the distributor's at the same price, who take their cut, and then onward to the retailer who take their cut before ALL having to sell at the same price.

ZERO COMPETITION from Production to Retail, everyone profits and it is the all time CLASSIC in price fixing.

I fondly remember a retailer in California a few years back. He had run a gas station for decades and was always pissed off at the price fixing and he was not permitted to sell gas at the price he wanted to sell it at. He had to sell it at the same price of those service stations in a radius to his station.

So, just before he retired, he had his storage tanks filled, and then SOLD IT AT COST just to piss off the OIL CARTEL!
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