March 15, 2005
The following is being distributed
at the request of the Petroleum Pricing Office:
Office sets maximum fuel prices effective March 15
Effective 12:01 a.m. Tuesday, March
15, 2005, the Public Utilities Boardís Petroleum Pricing Office (PPO)
is changing prices in accordance to its scheduled mid-month pricing
adjustment for all fuels it regulates, except in regions where a
price freeze is in effect.
On this date, the maximum price for all types of gasoline, which was
last set February 15, will increase by 1.8 or 1.9 cents per litre (cpl)
Ė depending on the rounding-off impact for a particular pricing
zone. In the case of distillate fuels, No. 2 blend furnace oil, last
adjusted March 5, will rise by 3.22 cpl and diesel by 0.1 cpl, while
stove oil will decrease by 0.32 cpl (the two latter fuels were
previously set March 7).
Residential propane used for home heating purposes, unchanged since
February 15, will move upward by 1.1 cpl.
David Toms, PPO director (acting), said fuel markets have
demonstrated volatile behaviour in recent weeks, with upward pricing
pressure continuing to impact on the fuels regulated by the PPO for
most of this pricing period.
Three prevailing concerns contributing to the volatility on the
market include OPECís (Organization of Petroleum Exporting
Countries) decision at its March 16 meeting in Iran regarding output
quotas; the International Energy Agency report of stronger global
growth in demand for fuel, particularly from the U.S. and China;
and, the availability of future oil and gasoline supplies.
The U.S. Energy Information Administration (EIA) report released
March 9 indicated that inventories for gasoline, though in a healthy
position, and distillates, which are at the lower end of the average
range for this time of year, had declined slightly over the past
week based on industry data. The result was a failure to ease
concerns about future supply for these products.
Besides the impact of scheduled and unscheduled refinery shuts,
market prices for refined products also edged upward because of the
high price of oil, which has firmly remained above $50 US for a few
weeks and came within pennies of breaking a previous trading record
(inflation unadjusted) of $55.67 US set last October.
The effects of this market activity have spread to all fuels,
particularly those used for home heating. Cold weather swept through
the U.S. northeast and Atlantic region, which are the
high-consumption regions for these fuels, and remained a factor for
increased demand forecasts in whatís considered an already tight
market. Besides the high price of oil, distillate prices have also
been driven by the strong demand for diesel.
Conversely, propane inventories, which have declined in recent
weeks, remain in the upper level of the normal range providing a
sense of confidence on being able to meet the winterís demand.
However, propane consumption was strong in some regions and this has
created pressure on this fuelís market price.
PPO benchmarks are based on the average price of refined products.
Illustrated in the following graphs are the market-price
performances of the five products regulated by the PPO, for recent
regularly scheduled periods up to March 11, 2005:
For the interruption formula to be used on gasoline and distillate
fuels, the PPO requires the average of market prices to be 3.5 cpl
greater or less than the current PPO benchmark
prices (except propane, which requires +/- 5.0 cpl) over five market
business days. As well, the interruption formula will only be used
five days after the last pricing adjustment, and as long as making
the change doesnít interfere with the regular pricing schedule.
1.Heating Fuels - Residential Propane - Maximum Tank Wagon Prices -
March 15, 2005
2. Automotive Fuels - Maximum Retail Pump Prices - Effective March
3. Heating Fuels - Maximum Tank Wagon (or ** Tank Farm) Prices -
Effective March 15, 2005.
Media contact: Michelle Hicks, Communications, 1-866-489-8800 or
2005 03 15