The following is being distributed at the request of the Petroleum Products Pricing Commission:

Commission releases May 15 regulated fuel prices

All fuels regulated by the Petroleum Products Pricing Commission (PPPC) in Newfoundland and Labrador will decrease May 15.

Effective 12:01 a.m. Thursday, the maximum prices for all types of gasoline will be reduced by 2.4 cents per litre (cpl). Distillate fuels will be adjusted downward � No. 2 from blend furnace oil by 0.5 cpl, stove oil by 0.24 cpl and diesel by 0.8 cpl. The price of residential propane used for home heating purposes will decline by 1.0 cpl.

George Saunders, PPPC commissioner, said world market conditions have been trying to stabilize since the end of the war in the Middle East. However, he noted that sensitivity in pricing continues to exist, as seen in recent days when oil and gasoline prices have volleyed slightly because of concerns about supply.

"At this time, the market behaviour has benefitted consumers in this regulated environment in that there have been successive declines in prices for particular fuels since March 25," said Mr. Saunders.

He pointed out that this is the first time since December 2002 that regular unleaded self-serve gasoline prices in Zone 1 (Avalon Peninsula) and Zone 6 (Deer Lake/ Bay of Islands/Corner Brook) have broken the 80-cent mark and are now 79 cpl.

"But there is always a caution that needs to be issued that the situation can change at any time," advised the commissioner. "We hope that some longer-term stability can be restored."

As the market�s demand season for home heating fuel passes (despite the fact that cooler temperatures still exist in Newfoundland and Labrador), these prices continue to gradually decline. Home heating fuel prices here are the lowest in Atlantic Canada.

It should also be noted that the calculation used by the PPPC for the price of furnace oil will not include a percentage of blended jet fuel again until October. The practice of blending jet fuel with furnace oil is used in this province so it can be stored in colder temperatures, and the PPPC incorporates this factor in its figures between October and May.

This is also the time of year refiners are switching their attention to gasoline production. The demand season for this fuel is fast approaching and analysts say supplies are lower than normal.

Another factor affecting petroleum prices is the announcement that OPEC (Organization of Petroleum Exporting Countries) will meet again in June to determine if another cut to production is needed to offset the amount of oil on the market. Prices are also being driven by the absence of Iraqi oil on the world scene since March, as well as the recent strong performance of the Canadian dollar.

Public Education

Mr. Saunders, along with researcher, David Hillier, completed a fact-finding tour of Trinity-Conception this past week where they made 49 site visitations with retailers and home heat agents.

This tour will continue in Placentia-St. Mary�s during the last week of May with the intention of having the Avalon Peninsula, excluding the City of St. John�s, completed by the end of June.

"These visits are instrumental in giving us a thorough understanding of issues and concerns retailers and distributors have when it comes to fuel, and it also gives them a better idea of what we do at the commission," said Mr. Saunders. "We will take any feedback we have received to date under advisement, and invite the public to contact our office with any concerns they may have as well."

Also in keeping with the PPPC�s education program is the commission�s participation in trade and information shows which gives the public an opportunity to speak directly to staff members about fuel price regulation. The next show the commission will appear in is the Home and Garden Show in Gander, May 30-31.

1. Automotive Fuels - Maximum Retail Pump Prices - Effective May 15, 2003;
2. Heating Fuels - Residential Propane - Maximum Tank Wagon Prices - Effective May 15, 2003;
3. Heating Fuels - Maximum Tank Wagon (or ** Tank Farm) Prices - Effective May 15, 2003

Media contact: Michelle Hicks, Communications. Tel: 1-866-489-8800 or (709) 489-8837; cell: (709) 486-4789.

2003 05 15                                        9:10 a.m.