There are three main factors influencing gasoline pricing:

1. Competition: market forces primarily drive gasoline prices. Different competitive conditions in each market usually explain variations in price. Gasoline market forces include wholesale prices, the number and efficiency of stations in an area, companies' marketing strategies and customer buying preferences. One or more of these factors can affect the price of gasoline in any given area.
2. Taxes: provincial and federal taxes account for almost 54 per cent of the average price of regular unleaded gasoline in Canada.
3. Refining and marketing costs: the distance gasoline has to be transported to market can affect prices, and marketing costs also vary from region to region.

Why do gasoline prices fluctuate so often and at the same time?
Most consumers look for the lowest price, so there is enormous pressure on all stations in an area to match that price or risk losing customers. Retailers must quickly react to prices posted on the street corners by their competitors and adjust their prices accordingly. If not, they risk losing customers. Prices appear to change in unison, due to the speed at which retailers must react to changes in price by their competitors.

Who monitors the gasoline industry to make sure prices are fair?
Several provincial governments monitor gasoline prices. Federally, Industry Canada′s Competition Bureau enforces the Competition Act. The Bureau promotes competition in the marketplace and investigates anti-competitive activities for all Canadian industries. The Competition Bureau and provincial governments monitor the gasoline industry to ensure it remains competitive.

For more information visit:

• Consumers' Association of Canada
• Petroleum Communication Foundation
• Canadian Petroleum Products Institute