Independent gas station owner fears Quebec cutting floor price will hurt business

Gas station owners worry about cutting floor price The owner of an independent gas station feels removing the floor price on gasoline will hurt small businesses like his.

The owner of an independent gas station on Montreal’s South Shore feels removing the floor price on gasoline will hurt small businesses like his and lead to less competition in the long run.

Jean-Philip Dauray is vice president of the Maurice Full Service Gas Station in Varennes, Que.

The price at the pump on Friday was $1.65 per litre, 12 cents cheaper than the Ultramar across the street.

“We are a small business. It’s the third generation that has managed a business,” he said. “We have less people to pay and, we also are very efficient. We transport by ourselves. We work hard with the provider to get the best price possible. We make good profit, but modest.”

Dauray said even though his competitors won’t match his low prices, he believes he’s keeping them in check.

“In Varennes, we opened the gas station two years ago, and before that, Varennes was one of the highest priced gas [towns] in Quebec,” he said.

Energy Minister Pierre Fitzgibbon said on Thursday that Quebec plans to implement a series of measures designed to lower gas prices. One of those was to stop setting a floor price, which is the minimum price gas stations are allowed to charge at the pump.“We have to say that yesterday was quite a victory for taxpayers,” said Francois Gagnon of the Canadian Taxpayer Federation.

Gagnon said he believes the policy will allow companies to compete on price.

“This mechanism had only one impact which was to truly inflate artificially the price that we pay at the pump,” he said.

HEC Montreal professor Pierre-Olivier Pineau is an energy expert and said the price floor is actually protecting small gas stations like Maurice.

“Larger companies, they can sustain low prices for a while, but if you are an independent retailer, you cannot and it’s sometimes used as a strategy to make some businesses go out of business,” he said.

Dauray fears this is what could happen to his family business.

“This will be very good for customers for the first times, and then the smaller companies like us, that cut the price, we won’t be in business anymore,” he said. “And if we’re not in the business, the price will raise.”

Dauray said he hopes the government will watch the situation closely and step in if the larger companies start undercutting to squeeze out the little guys.