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

Early adjustment warranted for gasoline prices

The Public Utilities Board�s Petroleum Pricing Office (PPO) has determined that an early downward adjustment to the maximum price for gasoline is warranted at this time.

The PPO usually sets the maximum prices for all fuels it regulates on the 15^th of every month. However, decreased gasoline pricing on the New York Mercantile Exchange (NYMEX) have met the fuel-price regulator�s criteria to use its interruption formula (implemented when commodity prices increase or decrease an average of 3.5 cents per litre [cpl] over at least five business days provided it doesn�t interfere with the normal pricing schedule).

At 12:01 a.m., Tuesday, June 22, the price for all types of gasoline will decrease by 6.6 or 6.7 cpl (depending on the pricing zone and the HST rounding-off effect). There will be no pricing adjustments for other fuels regulated by the PPO at this time because the interruption criteria for these products have not been met.

Acting director David Toms explained that during the latter part of the 30-day period used to calculate June 15 regulation prices, gasoline figures were significantly lower than the overall average for that period. However, high prices at the beginning of that time frame played a prominent role in minimizing the amount of the decrease when maximum gasoline prices were set last week.

Since then, gasoline prices have behaved such that they meet the PPO�s interruption criteria and require an early adjustment.

"Our office is monitoring fuel prices as it has in the past, and this pricing interruption can serve as further reassurance that we are continuing with our usual business of setting prices in an objective manner," said Mr. Toms. "The public can feel confident that, given the ongoing volatility in the markets, maximum fuel prices remain justified. With our regulation model, prices do not increase or decrease in Newfoundland and Labrador as quickly as they do in unregulated markets, but when changes do occur, they reflect the true market conditions since prices were last set."

NYMEX gasoline prices have experienced sharp declines, mainly as a reaction to OPEC�s (Organization of Petroleum Exporting Countries) stated commitment to increase its oil output quotas and ease fears about future supplies. On the other hand, there has been ongoing violence in Saudi Arabia and bomb attacks on two pipelines in Iraq early last week, which according to Bloomberg News accounts for 90 per cent of Iraqi exports. These situations raised concerns about future fuel supply availability.

Another development that is impacting upon market prices is a strike in Norway, the world�s third largest oil exporter. According to Bloomberg News, approximately 200 North Sea oil field workers walked off the job after two unions and the oil companies failed to reach an agreement on pensions.

Given the current market volatility, the PPO will continue to monitor conditions and will inform the public if any further adjustments are required before July 15.

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

1.Automotive Fuels - Maximum Retail Pump Prices - Effective June 22, 2004

2004 06 22                                       10:10 a.m.