Government Responds to Petroleum Products Committee Report

SERVICE N.S./MUNICIPAL RELATIONS--Government Responds to Petroleum Products Committee Report

The Nova Scotia government will not require companies involved in exploration and production of petroleum products to divest themselves of retail gasoline outlets.

Service Nova Scotia and Municipal Relations Minister Barry Barnet announced the decision today, Oct. 26, in response to recommendations of the legislature's Select Committee on Petroleum Products Pricing.

"There is evidence that divorcement has lead to higher prices where it is practised, and no evidence to support the theory that divorcement would lead to stable prices or level out price differences in Nova Scotia," Mr. Barnet said.

"There are also numerous legal and business climate issues around this concept. All these questions combine to make the concept of divorcement a decidedly unattractive one."

The minister said price regulation, similar to that of Prince Edward Island, is still on the table. "We must first determine which is the issue Nova Scotians are most concerned about," Mr. Barnet said. "Is it the cost of gas? Is it that prices go up and down so quickly? Depending on what the priority is, we may be able to address it through one or more of the committee's other recommendations, such as P.E.I.-style regulation or below-cost or single rack pricing regulations."

The government accepts the recommendation that it incorporate energy considerations in provincial policies and practices. The minister noted that this is already in place in many respects, such as the efforts of Transportation and Public Works to improve energy efficiency in government buildings.

The province, through the Department of Energy, will work with other provinces to address some of the other recommendations, including recognizing petroleum products as an essential commodity and urging the industry to better inform consumers on pricing issues. The province also accepts the recommendation that the federal Competition Bureau continue investigating allegations of predatory pricing.

Other recommendations, such as those dealing with alternate energy sources and more spending on public transit, need further review or are subject to budget considerations, the minister said.

Though the committee did not make any specific recommendations regarding the cost of home heating fuel, Minister Mr. Barnet said government is reviewing its programs available to help low-income Nova Scotians cope with increasing fuel costs during the winter.

"We are working on a more effective way to help low income Nova Scotians cope with the high price of heating fuel," the minister said.