Order P.990521-5 - Petroleum - Petro-Canada - Application for Price Increases (May 21/99)

IN THE MATTER of an application by PETRO-CANADA for non-crude related increases of 0.3 cents per litre in the prices of all grades of gasoline charged its dealers.

Wayne D. Cheverie, Q.C., Chair
Ginger Breedon, Vice-Chair
Elizabeth MacDonald, Commissioner

By Commission Order No. P.910828, a deadline for filing of applications relating to refined product price adjustments as a result of changes in non-crude oil costs was fixed at 15 March each year. On 11 March 1999, the Commission received an application from Ms. Sophie Turcot, Pricing Advisor – East Region for Petro-Canada for non-crude related increases of 0.3 cents per litre in the prices of all grades of gasoline charged its dealers.

The reason given for this request was in order for the Company to recover costs related to the management of the Petro-Points loyalty program, which was put into effect in this Province at no cost to their dealers due to the restrictions set out in Section 65 of the Petroleum Products Act with respect to promotional activities related to the sale of motor fuels and heating fuels.

The Commission gave preliminary consideration to this application at its meeting of 17 March 1999, and it was decided to give notice of this non-crude related application to the public by way of advertisement in the press. This Notice was dated 18 March 1999, and indicated that comments could be forwarded to the Commission on or before 15 April 1999 for its consideration prior to a determination being made with respect to the application. None were received.

Following this deadline, the Commission gave further consideration to the application and requested that additional information be requested of the Applicant with respect to promotional costs related to the wholesale price of gasoline to dealers.

This application required several amendments—the most recently revised application is dated and was received on 3 May 1999 following Commission approval of pricing adjustments based on crude oil costs. In addition, a response to the Commission’s above-noted inquiry was received by the Commission on 18 May 1999, and the amended application and response was given consideration this date.

After review, it was determined that it would be just and reasonable to authorize the requested increase of 0.3 cents per litre in the prices of all grades of gasoline sold to Petro-Canada dealers in accordance with the application and information submitted in the supporting documentation relating to the Petro-Points promotional program as this increase in the base cost of gasoline will not impact on the dealer’s allowable markup range, although it has the effect of increasing both the minimum and maximum pump prices to the consumer.

The Commission deemed that it is just and reasonable, based on this particular component of pricing, to increase Petro-Canada's dealer prices of all grades of gasoline by 0.3 cent per litre, effective 12:01 a.m., on Tuesday, 25 May 1999, and authorized these requested increases in accordance with the attached Order.

1. THAT the following wholesale tank truck prices are to be charged dealers in Prince Edward Island supplied by Petro-Canada, effective 12:01 a.m. on Tuesday, 25 May 1999:

PRODUCT	CENTS PER LITRE (INCLUDING Federal Excise and Provincial Taxes)
Regular Unleaded Gasoline	41.9
Mid-Grade Unleaded Gasoline	43.9
Premium Unleaded Gasoline	45.8
Low Sulphur Diesel	42.2 (no change)

2. THAT the above prices, with seven per cent G.S.T. added, shall be indicated on all documents accompanying deliveries of these products.

3. THAT the prices quoted in this Order, with adjustments resulting from tax changes only, shall remain in effect until otherwise ordered by the Commission.