Is gas in Quebec more expensive because of bad math?
Gas prices in Montreal and Quebec have continued to drop recently, hovering just above $1.00 in most regions and even dipping below in others. While that's all well and good, it turns out they could be cheaper, but aren't because of bad mathematics.
Every week, the Régie de l'énergie publishes an assessment of what it costs to sell a litre of regular gasoline and diesel fuel in the province. That assessment is used by gas companies when they set the price you pay at the pump.
For years the price has been calculated using the cost of Brent-type oil, which the province imports from overseas. But in 2015, Enbridge's Line 9B pipeline was reversed so it could begin to flow from west to east, bringing barrels of oil from Western Canada to Quebec.
Since then the oil supply in the province has shifted.
In 2013, two thirds of Quebec oil imports came from Africa, the North Sea and Mexico. Canadian oil accounted for just five per cent of total imports.
According to the National Energy Board by 2017, the majority of oil coming into Quebec has been imported from Alberta (Western Canadian Select-WCS) or the United States (West Texas Intermediate-WTI).
The difference in the price of oil per barrel is between $10 (WTI) and $40 (WCS) cheaper.
Despite the change in imports the Régie de l'énergie never modified the way it calculates the price of gas.
The good news, according to the Journal de Montreal the Régie has realised the error. In a document titled "Guide méthodologique pour l'établissement des différents relevés sur les produits pétroliers" the government body is questioning its use of Brent prices in its calculations and said it is currently studying alternative references for its estimate.
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