Competition Bureau
ToolsRelated topicsResourcesGasoline Prices in Kenora, OntarioOTTAWA, February 4, 2000 - The Competition Bureau has concluded that higher gasoline prices in Kenora, Ontario, as compared to some nearby communities, is explained by normal competitive forces. During the last year, the Bureau has received a number of complaints alleging that gasoline prices were artificially high in the Kenora area as the result of an agreement to fix prices. These allegations were based in part on the belief that: prices were significantly higher in Kenora than the nearest communities to the west (Clearwater Bay) and east (Vermillion Bay and Dryden); prices charged by all retailers in Kenora were the same; and retailers in Kenora increased their prices at exactly the same time. Information obtained by the Competition Bureau confirmed that prices were higher in Kenora than Clearwater Bay, Vermillion Bay and Dryden. It also indicated, however, that there were explanations for these differences unrelated to price fixing or other anti-competitive conduct. First, available information indicated that Clearwater Bay, Kenora and Dryden are in separate relevant geographic markets experiencing different competitive pressures. The two stations on Highway 17 in Clearwater Bay (approximately 20 km west of Kenora) primarily serve customers travelling long distances and their principal competitors are stations in nearby Manitoba rather than gas stations in Kenora. Provincial taxes are lower in Manitoba which, in turn, place downward pressure on wholesale and retail prices in Clearwater Bay. In Dryden and Vermillion Bay (approximately 90 km and 120 km east respectively), retail prices dropped due to the entry of a major superstore in the Dryden market that offers a high-volume discount retail gas bar. While information obtained by the Bureau confirmed that the majority of stations in the Kenora area charged similar prices most of the time, there were exceptions to this general observation. There was also information indicating that similar prices were the result of retailers independently deciding to follow price changes by other retailers, rather than the result of an agreement among retailers. For further information, please see the Backgrounder. The Competition Bureau is an independent law enforcement agency whose mandate is to maintain and encourage fair competition in Canada. The constitutional power to regulate retail gasoline prices rests with the provincial governments. For further information, please contact: Cynthia Grant 
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Created: 2000-02-04 Updated: 2005-07-21 |
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