Dan McTeague at a Petro-Canada station in downtown Toronto on Jan. 23, 2009. The Liberal MP is almost always correct in predicting the next day's gas prices.
How MP Dan McTeague is able to predict prices at the pump and dismay his political foes
January 25, 2009
Daniel Dale
STAFF REPORTER
Poor George Khouri. It's hard enough to unseat an anonymous Member of Parliament. Much harder to unseat a petroleum psychic.
"Constantly. Over and over again," complained Khouri, the Conservative candidate in Pickering-Scarborough East, his irritation undiminished three months after the 2008 election. "Six, seven, 10, 20 times a day. ... "
Dan McTeague's name on CFRB 1010. Dan McTeague's name on CP24. Dan McTeague's name on 680 News – every half an hour, every weeknight, between 5 p.m. and midnight.
How was he supposed to beat Dan McTeague?
"It's all people talk about when you go to the door," Khouri said. "`Oh, you're running against the Gas Man.' It's unfair."
For the Gas Man, a 15-year Liberal MP who has never been a minister, knowledge may not be power. At the very least, however, it is name recognition.
For Dan McTeague is a member of Parliament who doubles as a human coupon. For Dan McTeague knows how to calculate gas prices the day before the oil companies change them – and, unlike your everyday neighbourhood clairvoyant, he shares his valuable knowledge for free. On the "Tomorrow's Gas Prices, Today" section of his website, launched in April 2008, he posts, before 5 p.m., the next day's prices in nine Canadian cities. To the tenth of a penny, he is almost always correct.
"Because he's spent the time and done the homework," said Petro-Canada spokesperson Jon Hamilton, "he's figured out some things."
His accuracy has earned the MP acclaim across the country. His website now receives more than 30,000 hits per day. He has received hundreds of emails, he said, from people thanking him for saving them money at the pumps.
But in providing information giddily consumed by gas price conspiracy theorists, McTeague, 46, has himself become the subject of conspiracy theories. Surely, Khouri and others say, McTeague has an arrangement with the oil companies to receive prices in advance. Wrote one member of TorontoGasPrices.com: "McTague (sic) has some explaining to do. How does he know exactly what the changes are?"
It feels somehow inappropriate to ask for his magic formula. But McTeague, the Liberals' gregarious, outspoken and occasionally controversial Treasury Board, consumer affairs and consular affairs critic, is nothing if not candid.
This, he said, is how he makes the predictions. He pays more than $300 per month out of his own pocket – "and I've got five kids" – for a subscription to the Oil Price Information Service, a website that provides a daily list of oil companies' wholesale "rack" prices. Rack prices, based in part on the prices of gasoline futures and crude oil on New York markets, are posted on the companies' websites in the wee hours of each morning; McTeague's subscription simply gives him advance access.
There is a direct relationship between rack prices and retail prices. To predict prices at Toronto pumps, McTeague takes the Esso rack price – here, he said, Esso is the firm whose prices the others follow – and adds the Ontario gasoline tax (14.7 cents), the federal gasoline tax (10 cents), and the 7-cent-per-litre margin he says all major gas retailers currently allow themselves in the city. (When one company increases its margin, he said, the others quickly follow.) Then he tacks on the 5 per cent GST. Presto. Tomorrow's gas price, today.
"Frankly, anyone could do it," he said in a telephone interview. "The information is publicly available."
McTeague makes his predictions not for the attention, he said, but to demonstrate the uncompetitiveness of the Canadian oil industry – a problem he has long sought to remedy by amending the Competition Act to toughen restrictions on mergers and acquisitions, expand the definition of predatory pricing, and introduce new penalties for corporate conspiracy.
Unlike many consumers, McTeague does not believe the oil companies have illegally conspired to set identical gas prices. "You don't need to have price-fixing when you, in fact, have no competition," he said. "The big problem is concentration."
After the takeovers of numerous Canadian refineries and the closing of others, the wholesale market became uncompetitive, he said. And at both the wholesale and retail levels, he said, the major firms have worked to price independents out of business; where they have succeeded, there is no pressure on them to keep retail prices low.
"A lot of people said, 'Well, stop complaining about the problem and fix it.' So in order to fix the problem, I said, you have to make it pretty clear so everyone realizes there is a problem. I've been able to literally calibrate it, pinpoint it, quantify it, with the predictions."
Although Petro-Canada's Hamilton said McTeague is wrong to claim the industry is not competitive, he said McTeague's vocal criticism has "challenged the industry to do a much better job of explaining ourselves.
"I'll probably take flak for this at the office," Hamilton said. "But I kind of like the guy."
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