Nova Scotia’s gasoline regulator has rejected a complaint from rural gas station operators who claim their businesses are being hurt by grocery store promotions that offer drivers a few cents a litre off their next fill-up.
The Utility and Review Board issued a decision yesterday that concludes the promotions have not had an impact on the availability of fuel in rural areas and should be allowed to continue.
Rural retailers had complained the province’s largest food retailer, Sobeys, had helped the province’s largest gasoline retailer, Irving Oil, gain an unfair advantage by offering discounted gasoline as a reward for buying groceries.
But the board found the most important factor for consumers when buying gas is the location of a station, and it could find no evidence the promotions have had an impact on the viability of rural retailers.
“Promotions by themselves are not enough to substantially change purchasing patterns,” the board concluded. “Independent stations in remote areas appear to be largely immune to the effect of promotions.”
The board also concluded consumers want to keep the promotions and there should be no limits on the types of promotions, who can offer them and the size of the discounts offered.
However, the board said drivers using promotions should be restricted to purchasing no more than 100 litres of gasoline, and provincial regulations regarding promotions should be clarified.
The report also noted those opposed to the use of promotions provided no evidence to refute the key findings of two studies cited by the board.
Graham Conrad, executive director of the Retail Gas Dealers Association of Nova Scotia, said his group is not opposed to gas price promotions, but it remains concerned about the way Sobeys and Irving Oil are offering big discounts.
“The promotion is so lucrative that we just don’t know what the full impact will be,” Conrad said.