Last updated: Friday 10 March 2000 NATIONAL NEWS

MP says people in Labrador are being unfairly gouged by high gas prices ST. JOHN'S, Nfld. (CP) - Labradorians are being gouged "big time" by oil and gas companies, says Liberal MP Lawrence O'Brien.

O'Brien says he can't understand how fuel prices have gone up in Labrador despite the fact the winter supply of gas and home fuel oil is stockpiled in the fall to last until June or July, when tankers can once again navigate the northern waters.

The fuel is bought at fall prices. As crude oil skyrocketed this winter on the world market, no fresh supplies were brought in to coastal Labrador.

Earlier this month, O'Brien wrote Imperial Oil and Ultramar seeking explanations of why prices continue to rise in some communities despite the stockpile.

"Somebody is making huge, huge windfall profits out of this," O'Brien said in a telephone interview from the Labrador community of Happy Valley-Goose Bay on Thursday.

"There's gas gouging big time. There can't be a rational reason."

The price of gas has gone up in Goose Bay about 18 cents a litre since the fall, he said.

The Lake Melville area and Straits communities, such as L'Anse-aux-Clair and Red Bay, have also seen rising prices. Cartright has remained consistently high at 94.5 cents a litre for regular. There's been no increase in coastal communities north of Red Bay.

Labrador West and Churchill Falls get their fuel by train through the winter from Sept-Iles, Que.

Paul Reynolds, retail sales manager for Ultramar Ltd. in St. John's, wouldn't discuss the matter until he replied to O'Brien.

But Pierre Desrochers, spokesman for Imperial in Montreal, explained the prices on all the fuel inventory throughout the company get adjusted for the latest market price.

"It's a difficult issue," he said. "It's not an easy one to understand for no one."

It used to work the opposite way - inventory was depleted before a new price came in. Desrochers said that didn't benefit the consumer because there was too much of a lag time if prices went down.

"Absolutely," he said when asked if he believes the current system is fair.

O'Brien said his 89-year-old mother, a pensioner who lives in L'Anse-au-Loup, saw her heating bill double since last year to $1,000 and she's not even the worst-case scenario of the hardship among Labradorians.

The price of self-serve regular gas rose this week to 83.9 cents a litre in St. John's, a 7.4-cent increase in a week.

Meanwhile, there was also a shock at the pumps in Fredericton. Gasoline prices have shot up 10 cents a litre since Thursday morning. A litre of self-serve regular unleaded was selling for 76.9 cents.

Gas was selling for 78.9 cents a litre in Halifax and about 68.9 cents in Prince Edward Island - the only province that regulates fuel prices.

Rising prices have prompted some consumer groups in Atlantic Canada to step up their battles.

A Nova Scotia-based group is urging motorists not to buy gas Friday, Saturday or Sunday. Spokesman Rufus Peacock, of the Halifax area, says a boycott would send a message to the oil companies and governments.

Peacock says the governments are raking in windfall profits off gasoline through taxes and can afford to lower the tax.

In St. John's, the Consumer Group for Fair Gas Pricing was to meet at city hall Friday to plan some sort of short-term consumer action. Spokesman Dennis O'Keefe says he'd like to see a long-term boycott, but says that's impossible because people need to drive.

Another group, Newfoundlanders Against Gas Gouging, has launched a petition drive, calling on the Newfoundland government to regulate gas prices.

(St. John's Telegram)

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-- Martin Thompson (mthom1927@aol.com), March 10, 2000