ST. JOHN'S, Nfld. - The front-runner in the campaign to replace Brian Tobin as Premier of Newfoundland has made a pledge to regulate the province's fuel prices within three months of taking office.In ...
STABLE OR UNSTABLE?: A would-be premier thinks regulating fuel prices will help the Newfoundland's economy by stabalizing fluctuations.
ST. JOHN’S, Nfld. – The front-runner in the campaign to replace Brian Tobin as Premier of Newfoundland has made a pledge to regulate the province’s fuel prices within three months of taking office.
In a list of items to be implemented under a new “workplan” for the province released in December, former Health and Community Services Minister Roger Grimes claims that regulation is needed to restore consumers faith in the economy.
“The people of the province have no confidence in the fuel industry to regulate itself in a manner that is responsive to the realities currently facing Newfoundlanders and Labradorians,” says Grimes in the plan. “Consumers must be satisfied that there is stability in the market and that price changes are subject to an objective justification.” He says legislation will be introduced to permit the provincial government to proclaim a regulatory system to set prices of gas, diesel and home heating fuel. Although regulating fuel prices might sound wonderful, Ralph Boyd of the Atlantic Provinces Trucking Association believes consumers would soon find that the benefits are over-rated.
Regulation tends to reduce the positive as well as the negative effects of price fluctuations, Boyd also argues.
“Regulations can’t stop fuel prices going up. At best, they can only spread out the impact of the increase,” argues Boyd.
“But that works both ways – when the price drops in a regulated environment, the length of time it takes for the maximum benefit to reach the consumer is also extended.”
The Rock would be the second jurisdiction in Canada to regulate its prices; Prince Edward Island has done so since 1991.
Contrary to Boyd, Frank Barry, president of Prince Freight Lines, a Wellington, P.E.I. trucking company, thinks regulation works.
“I believe it has kept prices down, and I’m not going to knock that.” n