Regulation serves Islanders well, P.E.I. gasoline retailers say

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The Island Regulatory and Appeals Commission has been doing a good job for Islanders, says a representative for the P.E.I. Gasoline Retailers Association.

Dale Mader made the

remark in response to APM president Tim Banks’ criticism of IRAC on Monday during the final day

of a hearing on two applications to open gas stations in Stratford.

Mader said regulation has been around for a long time and IRAC has been following the mandate the provincial government gave it.

“I think the process has served Islanders very well for many years,” he said.

During his appearance before the commission, Banks called IRAC a red tape regime, said it was making a mockery of free enterprise and should spend less time policing things it can’t control, like gasoline prices.

But Mader said Banks’ vision of free enterprise would work great in an ideal world, which doesn’t exist on P.E.I.

“The petroleum market is not an ideal world.”

Nova Scotia sells 10 times as much gasoline as P.E.I. while Quebec and Ontario sell tens of billions of litres more than Island stations, which sell about 200 million litres a year, he said.

Mader said people should be able to buy gas with a reasonable amount of convenience and there would be clusters of them in populated areas with none in rural areas if there wasn’t regulation, he said.

“What about the people

that live at either end of the Island?”

Free enterprise could put rural stations out of business and the commission’s role is to do what’s best for Islanders, he said.

“The government has made it clear, I believe, that the Island should be treated as one Island community.”

During his appearance at the hearing, Banks said a lot of rural stations have closed despite

regulation in the industry.

Mader agreed a lot of stations have closed, but said a lot more would close without regulation because of the low volume of gas sold on P.E.I.

“The market on P.E.I. has not been growing.”

In the case of new applicants, like the ones for the Stratford stations, IRAC needs to consider the effect they would have on existing retailers because the market isn’t growing, he said.

“The bulk of what they achieve, by their own admission, will come from existing retailers.”

Mader said the free market isn’t always ideal and while regulation isn’t necessarily in place to keep businesses afloat, it is there to make sure Islanders can fill up near where they live.

“The regulation is probably more directed to make sure all Islanders, no matter where they live, have access to gasoline.”

rross@theguardian.pe.ca

Organizations: Islanders, Island Regulatory and Appeals Commission

Geographic location: Iceland, Stratford.Mader, Nova Scotia Quebec Ontario

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Recent comments

  • False Hope through Regulation
    August 26, 2010 - 23:20

    Regulating gasoline is just as real and possible as regulating the internet. IRAC costs islanders a fortune. It curtails business, stops growth and development, and masks the benefits that we would enjoy through increased competition and normal market forces. We have been nursed for years to feel secure under the care of the government. Regulation over that which is absolutely necessary Serves no one well!

  • You gotta be Kidding Me
    August 26, 2010 - 22:59

    Over regulation ALWAYS undermines the market. It's pure pandering to even pretend that we can regulate the gasoline business. There is no ideal world anywhere in the world. The market always knows best. No one will ever know the incredible cost the people of PEI have had to pay do to the choke-hold that regulation has had. We feel a sense of protection but in the end we waste mountains of money and opportunity.

  • illogical logic
    August 26, 2010 - 11:27

    what a silly argument re free enterprise on PEI - does Mr. Mader not realize that shoppers in smaller provinces like the island still require access to retail items such as gasoline, food, clothing and shelter just like consumers in Nova Scotia, Quebec and Ontario. using his logic we might just consider closing retail operations here altogether; consumers from West to East on PEI could then drive (with sufficient gas) to the mainland for their shopping needs. we live here and we'll continue to buy locally, thank you very much.