If you’ve been shaking your head every time you leave the gas pump lately because of the consistency in prices at different suppliers that are cities apart.  You may have a reason to be a little suspicious of such consistency in a free market place where supply and demand is supposed to be the determiner of price.

Since I don’t drive, my information concerning the fluctuation at the gas pumps in the last few months comes mainly from the people I talk to every day, and I have talked to a number of Canadians lately who are a little suspicious of the consistency in gas prices in locations that are in different cities.

These thoughts started running through my mind after learning that 13 people and 11companies in Quebec were recently charged with fixing the price of gas in four cities in Quebec.

Three members and one company of what is being called a cartel pleaded guilty Thursday in Quebec Superior Court in Victoriaville, to conspiracy to fix retail gas prices.  Apparently, they phoned each other and agreed to a fixed price.  Penalties of over $2 million were imposed against the guilty parties who operated in the cities of Sherbrooke, Victoriaville, Thetford Mines and Magog, which are all south of Montreal.

The Competition Bureau stated that information they obtained suggests that an overwhelming majority of gasoline retailers in these markets took part in the agreement to fix prices.

The companies that were dragged into court are Les Petroles Therrien Inc., operating the Petro-T sign, and Distributions Petrolieres Therrien Inc. and Ultramar Inc.

This news sends a direct message that the Competition Bureau will take immediate action to bring to justice individuals and companies depriving Canadians consumers of the benefits of competition, like lower gas prices.

The Competition Bureau’s investigation into price fixing of gas used wiretaps, searches and information provided by individuals that were given immunity from prosecution for testifying.

The Competition Bureau has said that their investigation into price fixing at the gas pumps will continue in all markets in Canada, suggesting in their news releases that Quebec wasn’t the only province where gas price fixing was suspected.

Conspiracies to fix retail prices of a product are difficult by their very nature to detect and prove since suspicions and evidence of identical prices are not sufficient to indicate an illegal activity has occurred.  Securing a conviction under Canadian law requires the Bureau to dig up evidence that proves beyond a reasonable doubt that competitors have agreed to fix prices and that any agreement will have a noted impact on the level of competition for their product.

It probably doesn’t surprise a lot of Canadians and gas consumers around the world that companies would consider making an agreement to fix the price of their product with their competition at a level that allows both to milk the public at a rate that most companies would kill for.

Many after reading this many consumers will be paying greater attention to the price of gas at different geographical locations they choose to purchase gas at.  The unearthing of this gas fixing cartel may cement beliefs that many gas buyers have believed for many months when they approached the pumps.  That gas suppliers were artificially controlling the price of gas at an unnecessarily high level and that suppliers may have made an agreement to fix the price of gas and in the coming weeks we may find out just how deep this rabbit hole goes.