Order P.930301-2 - Petroleum - Imperial Oil Limited - Imperial Service Station

Order No. P.930301-2

IN THE MATTER of Section 46 of the Petroleum Products Act, R.S.P.E.I. 1988, Cap. P-5.1

- and -

IN THE MATTER of alleged non-compliance with Section 30 of the Petroleum Products Act, supra, in respect of IMPERIAL SERVICE STATION located at 122 Euston Street, Charlottetown, owned by Imperial Oil Limited (ESSO Petroleum Canada), and leased and operated by Robert Taylor (R. L. Taylor Ltd.), holder of Petroleum Products License No. D2048-00.

Monday, the 1st day of March, A.D., 1993

BEFORE

Linda Webber, Chairman
John Blakney, Vice-Chairman
James Nicholson, Commissioner

Decision and Order

Appearances and Witnesses

Participants in the hearing and the parties for whom they appeared were as follows:

FOR R. L. TAYLOR LTD. - RESPONDENT:

Witnesses:

Mr. Robert L. Taylor, Licensee - Imperial Service Station
Mr. Howard D. Bowie, Accounts Executive, Imperial Oil Limited

FOR THE COMMISSION:

(Mrs.) H. Doris Pursey, Director - Petroleum Division
Mr. Harry MacDonald (Witness) - Assistant to Director - Petroleum Division

RECORDING SECRETARY:

(Mrs.) Faye Weeks

Decision

I. INTRODUCTION

On the 26th day of January, 1993, the Island Regulatory and Appeals Commission ("the Commission") issued a Notice of Hearing indicating that a hearing respecting alleged non-compliance by Robert L. Taylor of R. L. Taylor Ltd. with Section 30 of the Petroleum Products Act, supra, in respect of Imperial Service Station, 122 Euston Street, Charlottetown, owned by Imperial Oil Limited, and leased and operated by R. L. Taylor, holder of Petroleum Products License No. D2048-00 issued under the Petroleum Products Act, supra, would commence on Thursday, the 4th day of February, 1993, at the hour of 9:00 a.m. Notice of the hearing was served on Mr. Taylor by Mr. Harry MacDonald, Commission Staff Member, on 27 January 1993, and a copy of this Notice was mailed on the same day to Mr. Bowie of Imperial Oil Limited.

II. EVIDENCE

Mr. Harry MacDonald, Assistant to the Director of the Petroleum Division, gave evidence that on 24 November 1992, an inspection conducted at the Imperial Service Station operated by Mr. Taylor revealed that regular gasoline was overpriced by 1/10th of a cent per litre and mid-grade and premium gasolines were overpriced by 2/10ths of a cent per litre. This overpricing had been discussed with Mr. Taylor at the outlet, and a letter confirming that overpricing had been noted was later forwarded to Mr. Taylor at the outlet. Mr. MacDonald testified that this matter was then referred to the Commission, and on the information then before it, the operator was given the opportunity of pleading guilty and paying a fine of $250.00, or in default thereof, of appearing at a show cause hearing. The operator in this case chose to come before the Commission to respond to the alleged non-compliance under the Petroleum Products Act, supra. Seventeen exhibits were filed in this hearing by the Commission and Mr. MacDonald gave testimony with respect to each of them.

Mr. Taylor then took the stand and noted that he was in agreement with the facts given in the matter, but that he chose to appear before the Commission due to the fact that he wished to make clear that the violation was an error and was not a deliberate attempt to make unauthorized profits. Mr. Taylor noted that his self-serve prices have been and are significantly below the maximum allowable prices, and that if he wished to increase his profits, he could legally raise his self-serve prices. Mr. Taylor indicated that 50% of his sales are through the self-serve island. He further indicated to the Commission that he had been in the process of having new equipment installed during the fall of 1992, and that at some point his prices must have gotten out of line. He also noted that there was a period of time when his chief console operator, Mr. John Manning, had been hospitalized and it was Mr. Manning who usually did the pricing calculations. Mr. Taylor admitted to determining his pump prices himself on at least two occasions during the period under review.

Although this hearing was called to deal with an alleged pricing infraction which occurred on 24 November 1992, Mr. Taylor also led evidence with respect to a further pricing violation which had come to light upon the filing of Mr. Taylor's application dated 5 January 1993 for renewal of his Petroleum Products License, which application was filed with the Commission on 18 January 1993. A review of the file confirms that this noted violation resulted in a further visit to the outlet by Mr. MacDonald on 18 January 1993, which visit revealed that on that occasion, Mr. Taylor's regular unleaded gasoline was overpriced by 2/10ths of a cent per litre and his mid-grade and premium unleaded gasolines were overpriced by 1/10th of a cent per litre. Mr. Taylor at that time signed written documentation confirming his pump prices on that date. Mr. Taylor explained that when the price of product to him was reduced (on 22 December 1992) by 2 cents per litre--he simply lowered his pump prices by that amount without taking into consideration the fact that a 2 cent per litre decrease would also reduce the amount of GST payable thereon. Rather than set up another hearing with respect to this further violation, admitted by Mr. Taylor in his evidence, the Commission will deal with both violations in this Decision and Order.

In response to questions by the Director, Mr. Taylor admitted to having operated the outlet for several years, that he was a member and former officer and director of the P.E.I. Retail Gasoline Dealer's Association (which Association regularly publishes allowable gasoline prices in its publication "The Station Reporter"), that he is a subscriber of the Guardian, in which publication the Commission periodically publishes allowable gasoline prices, that gasoline is his chief commodity, that the GST has been in effect for over two years, and that he has obviously not paid enough attention to his pump prices.

Mr. H. D. Bowie gave evidence as a representative of Mr. Taylor's supplier, Imperial Oil Limited, and filed Exhibit No. 18 entitled "Automotive Monthly Stewardship and Performance Report" in relation to this outlet in order to assist the Commission in determining the effect on the public of the overpricing on the full-serve pump island at this outlet. Upon questioning, Mr. Bowie indicated that Imperial has always been satisfied as to the honesty of Mr. Taylor in its dealings with him, but views the present situation of overpricing very seriously. Mr. Bowie noted that when prices change, the invoices to dealers are stamped in red ink to bring changes to their attention, and that prices are monitored periodically.

III. FINDINGS

The Commission has determined a that breach of Section 30 of the Petroleum Products Act, supra, has taken place on at least two occasions at the Imperial Service Station, 122 Euston Street, Charlottetown operating under Petroleum Products License No. D2048-00 issued by the Commission under this Act.

This determination is made based on the following findings of fact:

1. Exhibits 11, 12 and 13 substantiate that the prices of gasoline on the full-serve pump island operated by Robert L. Taylor at the Imperial Service Station were above the allowable maximum prices on 24 November 1992.

2. The evidence of Mr. Taylor substantiated by file documents confirms that the prices of gasoline on the full-serve pump island operated by Robert L. Taylor at the Imperial Service Station were again above the allowable maximum prices on 18 January 1993.

3. The evidence of Mr. Taylor reveals that there appear to have been difficulties in properly calculating appropriate pump prices, that although assistance is readily available from his supplier, the R.G.D.A., and this Commission, such assistance was not sought, and that insufficient care was exercised to ensure appropriate pricing in this fully regulated environment.

The second violation, coming in as it did on the heels of the first, indicates a lack of attention bordering upon gross negligence. Having been shown that he was not pricing correctly, Mr. Taylor should have been even more careful. For that reason, the Commission considers that second violation even more serious than the first.

Order

THE COMMISSION HEREBY ORDERS AS FOLLOWS:

1.THAT a fine of Two Hundred and Fifty Dollars ($250.00) be paid by Robert L. Taylor of R. L. Taylor Ltd., lessee and operator of the Imperial Service Station, Charlottetown for the pricing violation which occurred on 24 November 1993, and that a further fine of Three Hundred and Fifty Dollars ($350.00) be paid by Robert L. Taylor of R. L. Taylor Ltd. for the pricing violation substantiated on 18 January 1993, and that a warning be issued to Mr. Taylor that any further breaches with respect to Section 30 of the Petroleum Products Act will be dealt with by way of one or more of the penalties available under that Act.

DATED at CHARLOTTETOWN this 1st day of MARCH, A.D., 1993.

BY THE COMMISSION:

Chairman

Vice-Chairman

Commissioner