November 15, 2003
(Government Services and Lands)
The following is being distributed at the request of the Petroleum Products Pricing Commission:
Commission releases maximum fuel prices for November 15
The blending of jet fuel with home heating oil and a fuel-price freeze for coastal Labradorís north and south regions play large roles in this round of regulated pricing for Newfoundland and Labrador.
Fuel prices on the world market over the past 30 days have resulted in a minimal overall price movement in this province. However, it should be noted that this past week witnessed a gradual pressure on prices as concern grows over continued unrest in the Middle East (terrorist attacks on Saudi Arabia and Iraqi oil supplies) and the onset of cold weather triggered a slight increase in demand for home heating fuel.
The need for gasoline has eased since summer ended, and so far, the overall demand for home heating fuel is going through a normal seasonal pattern and hasnít yet dramatically impacted current supplies. Therefore, industry inventories and import levels are believed by analysts to be sufficient to meet the current demand placed on various petroleum products.
But now that winter is approaching, oil companies in Newfoundland and Labrador will begin blending jet fuel with their home heat products to allow for improved performance during the colder months. As in the past, the Petroleum Products Pricing Commission (PPPC) will factor this additional cost into furnace oil prices until next spring/summer.
Effective 12:01 a.m. Saturday, November 15, the maximum price for all types of gasoline will decrease by 1.8 or 1.9 cents per litre (cpl) Ė depending on the HST rounding-off effect for a particular pricing zone.
Distillate fuels (home heat and diesel) will see slight increases, as furnace oil moves upward by 0.84 cpl, stove oil by 0.20 cpl and diesel by 0.1 cpl. Residential propane used for home heating purposes will rise by 0.2 cpl.
George Saunders, PPPC commissioner, noted that most of the regulated fuel prices set at this time are significantly lower than prices established November 15, 2002.
Specifically, gasoline shows a 3.4 or 3.5 cpl difference and diesel is down by 3.1 cpl. Home heating fuel is also lower, with furnace oil showing a 1.66 drop and stove oil is 2.3 cpl less. The only fuel to show an increase in price over last year is residential propane.
"The regulation formula used in this province is reflecting the true market conditions as they occurred over the past 30 days," said Mr. Saunders. "All eyes continue to be on OPEC (Organization of Petroleum Exporting Countries) as they implemented a production cut November 1 to prevent a glut in the market. Now analysts are saying OPEC increased production in October ahead of their self-imposed deadline, and another meeting December 4 will determine if there will be another cut in production to offset the projected rise in supplies and drop in prices.
"We will have to wait and see what will take place and apply our formula to the resultant impact any decisions could have on world market prices," said Mr. Saunders.
Mr. Saunders reiterated the fact that current maximum prices there are lower than those established last year, and this area will see a diminished frozen price for the next several months.
"These zones require special attention because of the discontinuation of fuel deliveries during the winter months," said the commissioner. "Our trip to Labrador this past August as part of a fact-finding tour gave us a more thorough understanding of the regionís fuel distribution network, and we believe a price freeze is the best method of establishing prices there at the present time."
Fuels - Maximum Retail Pump Prices - Effective November 15, 2003;
Media contact: Michelle Hicks, Communications. Tel: (866) 489-8800 or (709) 489-8837. Cell: (709) 486-4789.
2003 11 15 9:30 a.m.