NLIS 3 July 4, 2006 (Government Services) The
following is being distributed at the request of the Public Utilities
Board�s Petroleum Pricing Office (PPO): Maximum
gasoline prices see slight increase through interruption formula Effective
12:01 a.m., Monday, July 3, 2006, the Public Utilities Board, through
its Petroleum Pricing Office, increased the maximum prices for all types
of gasoline by 0.2 cents per litre (cpl) in Newfoundland and Labrador
(NL). This
slight increase was initiated because the average of the pricing
movement on the commodities exchange last week was sufficient to trigger
the board�s interruption formula (see Backgrounder). The criteria were
not met for the other fuels regulated by the board (automotive diesel,
furnace/stove oil and residential propane used for home heating
purposes), and there will be no changes to their maximum prices. Pricing
instability continued to exist for refined petroleum products on NYMEX
(New York Mercantile Exchange) over the past several weeks, which saw
not only periods of decreases but frequent upward movements as well.
However, regulated maximum fuel prices in this province remained
constant up to this time. While there have been areas in Barring
any mitigating circumstances, the current maximum prices for gasoline
and the other products will remain in effect until July 15 as the
timeframe for use of the interruption formula has expired. FUNDAMENTALS Gasoline
has been the fuel product of interest for market watchers during the
past several weeks as the economic fundamentals of demand/supply have
played a major role in the direction of refined fuel prices since the
peak driving season got underway. Concerns
have both heightened and eased as speculation continued about whether or
not there are sufficient supplies to keep up with the peak demand
driving season. This was particularly evident late last week as the
United States (U.S.) and The
weekly inventory report from the U.S. Energy Information Administration
(EIA) this past Wednesday showed gasoline stockpiles had decreased for
the first time in nine weeks, and levels remain in the middle of the
average range for this time of year. In fact, during the previous week,
the report indicated that the average gasoline demand levels for the
world�s largest consumer of fuel were vigorous and at their highest
ever for that same period over previous years. This is despite elevated
fuel prices, and led to a rally in prices for all refined fuels. One
major concern for the market has been the potential impact on pricing
should there be any fuel supply disruptions. One instance was the recent
closure of a key shipping channel in Still
applying pressure to the markets are geopolitical events, such as
conflicts in Iraq, Nigeria and Iran, which have affected the security of
fuel supplies and are still playing roles in keeping the commodities
markets jittery because these areas are significant sources of crude
oil, which is used to make products such as gasoline and distillates
(furnace/stove oil and diesel). BACKGROUNDER Interruption
formula:
Regulated
fuel prices are adjusted on the 15th of each month using the
average daily prices for most finished petroleum products as listed on
NYMEX (New York Mercantile Exchange). In the event of volatile behaviour
between normal price adjustments, the interruption formula is used by
the board based on specific criteria to make upward or downward interim
price changes as warranted in the marketplace. For
the interruption formula to be used on gasoline, diesel or furnace/stove
oil, price fluctuations on NYMEX must exceed an average of � 3.5 cpl
over a five market business-day period. Adjustments are then made where
price increases or decreases are warranted. In the case of residential
propane, figures are derived from pricing activity at the HST
impact:
The rounding effect of the HST (Harmonized Sales Tax) may create a
slight variation in the magnitude of price changes in each zone for
gasoline and diesel fuels. Please refer to the price tables related to
this announcement to determine the maximum price for your area. NOTE TO EDITORS: 1. Automobile Fuels � Maximum Retail Pump Prices � Effective July 3, 2006 2006
|
|
All material copyright the Government of Newfoundland and Labrador. No unauthorized copying or redeployment permitted. The Government assumes no responsibility for the accuracy of any material deployed on an unauthorized server. Disclaimer/Copyright/Privacy Statement |