While ending gas price regulation, as suggested by Liberal leader Stephen McNeil, may not be the answer to reducing the pain motorists are experiencing at the pumps, taking a look at how gas prices are set in this province couldn't hurt - especially with gas prices north of $1.42 a litre and some speculating they could hit $1.50 in the coming weeks or months.
When gas regulation was implemented in 2006 by a previous Conservative government it was never meant to result in lower prices. It was designed to control the wild swings in gas prices that saw the cost of fuel fluctuate wildly from day to day, or even hour to hour in some markets.
Also, by setting price margins, it was also designed to protect a number of small, rural retailers who were struggling to survive.
In some respects, regulation has failed. The number of smaller gas stations is not where it was a decade or so again and many communities that had a small family-operated gas station now find themselves without any service at all.
Earlier this week, Nova Scotia PC Party leader Jamie Baillie suggested that the time has come to rethink regulation. He accepts the fact it was his party that brought the system to Nova Scotia, but he is quick to point out that times have changed and we really need to take a long, hard look at whether regulation should be continued or whether the system needs to be opened up to supply and demand.
The biggest question should not be if price regulation needs to be scrapped; it needs to focus on how much federal and provincial tax is collected at the pump. Most consumers probably have no clue how much of their fuel purchases go to the taxman. In fact, a fairly large chunk of what everyone pays to gas up their vehicle goes to either the provincial or federal coffers.
Both McNeil and Baillie say the province needs to reduce the taxes collected on gasoline, while the province counters that money collected from fuel taxes supports health care, highways and education - the programs and services Nova Scotians have said are priorities.
Gas prices in Nova Scotia, like they are in the rest of Canada, are influenced by world events and markets. They rise and fall according to supply and demand. It's something that is frustrating, and often has no reason, but it's also reality. Keeping or scrapping gas regulation is not going to change this, but it doesn't hurt to have the conversation.
