Effect of Nova Scotia Gasoline Price Regulation on Consumers, Business and Tax Revenue
Pyare Arya

Abstract
The main objectives of the gasoline price regulation in Nova Scotia are to reduce fluctuations in gasoline prices, give a fair margin to wholesalers and retailers, assure gasoline supply to retailers, and stop closure of rural gasoline outlets. The Nova Scotia Utilities and Review Board (hereafter referred to as the Regulator) gives the detailed formula it uses for setting the price of gasoline each week. The objective of the paper is to analyze the gasoline pricing formula used by the Regulator and study its effects on consumers, wholesalers, retailers and tax revenue. To achieve the objective, data available on the website of the regulator is used. The period of the study is from October 2009, when the Regulator started fixing weekly prices, to December 2012. The paper starts with brief review of literature on the subject and then moves on to discuss effect of different elements of the formula on consumers, wholesalers, retailers and tax revenue. The paper finds that consumers have little to cheer about regulated prices which are tailored to give government more revenue and businesses higher margins than they would have earned in a competitive market.

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