Government Services
May 22, 2008The following is being
distributed at the request of the Public Utilities Board�s Petroleum
Pricing Office (PPO):
Maximum Prices Increase
Zone 11a and 11b Price Freeze Lifted
The Public Utilities Board, through its Petroleum
Pricing Office, will set new maximum prices for regulated fuel products,
as per its scheduled biweekly pricing adjustment. Effective 12:01 a.m.
Thursday, May 22, 2008, maximum prices will increase as follows,
All types of gasoline by 4.3 or 4.4 cents per
litre (cpl) - depending on HST rounding;
Automotive diesel by 3.9 or 4.0 cpl � also
depending on HST rounding;
Furnace and stove oil by 1.75 cpl; and,
Residential propane used for home heating
purposes by 1.1 cpl; and,
Due to the lifting of the prize freeze in
Zones 11a and 11b (Coastal Labrador South �Tanker Supply &
Coastal Labrador South - Drum Delivery), maximum prices in this
zone will increase as follows: 25.7 cpl for gasoline, 42.7 cpl
for ultra low sulphur diesel, and 34.79 cpl for stove oil.
During the previous two weeks the price of crude oil
has been reaching new all-time highs almost daily, reaching close to
$130 U.S. a barrel recently. While the market price of crude oil is not
a component of the maximum regulated price, it is a major underlying
factor in the pricing behaviour of refined petroleum products on the
commodities market.
Seasonal gasoline demand continues to increase, with
the coming U.S. Memorial day weekend being seen as the kick-off of the
summer driving season. Concerns also continue to be expressed about the
strength of current gasoline stocks and their ability to adequately meet
this demand. Also of note is the dramatic price increases for distillate
fuels (automotive diesel and furnace/stove oil) in recent weeks, despite
reduced North American demand as the weather improves.
Prices for all products have seen pressure from
reduced Nigerian output and rising tensions between the west and Iran. A
major spike in global demand is also coming from China as it copes with
the repercussions of the recent major earthquake, which resulted in the
shut down of significant domestic coal and petroleum production and
large scale disruptions to the electrical grid. It is expected that
significant diesel generation will be required to cover these shortfalls
in the short term.
The Board recognizes the challenges that current
prices pose to consumers throughout the province and will continue to
monitor market data to ensure that maximum prices reflect the costs
associated with supplying these products to consumers, and permit a
secure supply of fuel in the local network.
PRICE FREEZE LIFT
In line with established guidelines upon the
resumption of the shipping season and the delivery (or imminent
delivery) of new supplies via marine shipment, the price freeze will be
lifted in Zones 11a (Coastal Labrador South �Tanker Supplied) and 11b
(Coastal Labrador South � Drum Delivery). As the winter supply is
depleted new fuel products have to be purchased at current market prices
and these higher costs are reflected in the increased maximum allowable
prices.
The price freeze in Zone 14 (Coastal Labrador North)
will remain in effect for the time being. The Board will be monitoring
the situation closely as it is expected that the shipment of new
supplies could resume shortly.
- 30 -