January 15, 2002
(Government Services and Lands)
The following is being distributed at the request of the Petroleum Products Pricing Commission:
After almost six months of declining prices for petroleum products in Newfoundland and Labrador, the maximum price for most products will increase slightly this coming month. However, propane users are going to receive a further decrease in price for the same period. It is also important to note that this increase represents the first upwards adjustment in petroleum prices since May of 2001, prior to the establishment of the commission.
The maximum price of gasoline is increasing by an average of 1.9 to 2.0 cents per litre, and home heating fuels, stove oil and furnace oil, excluding propane, are increasing by an average of 1.3 to 1.4 cents per litre, effective January 15, 2002. In addition, diesel fuel is increasing by an average of 1.2 to 1.3 cents per litre. These increases are being applied because of the fluctuations in world market pricing in the period December 15, 2001 to January 15, 2002. The increase is primarily caused by a slight increase in demand because of winter, although the mild winter being experienced overall should keep prices fairly stable over the long haul. As well, actions by OPEC in cutting production, the current U.S. recession, the war on terrorism, and the significant decline in demand for aviation fuel have all had an impact on oil prices throughout the world.
The price of propane used for home heating purposes has declined a further two cents per litre during the same period. As was pointed out when propane was regulated last month, the benchmark pricing of propane is based on the average weekly contract rack price at Sarnia, Ontario, as published by Bloomberg Oil Buyer's Guide (OBG). During this period, it was noted that propane pricing overall sustained a decline.
This price adjustment for gasoline, diesel fuel, and home heat oil does not necessarily mean there will be major increases at the pumps throughout the province, because companies have been selling below the maximum regulated price in many areas. It is the hope and desire of the commission that this practice will continue. It reflects a healthy industry, with good competition at work, and the consumer has been fortunate to receive the overall benefits of this action. The mild winter being experienced has also contributed to reduced demand for home heating fuels, and reduced demand helps keep prices stable.
Even with this increase (the first since the commission was established), the price of petroleum products in Newfoundland and Labrador is far below the same period last year, when gasoline was selling well over the 90 cents per litre mark in most of the province, and in the metropolitan areas over the 85 cents per litre level. As well, these prices are effective for the next 30 days, thereby insuring stability of pricing across the province.
Media contact: George Saunders, Commissioner, (709) 489-8877, toll-free: 1-(866) 489-8800.
Heating Fuels - Residential Propane - Maximum Tank
Wagon Prices - Effective January 15, 2002
Heating Fuels - Maximum Tank Wagon (or Tank Farm)
Prices - Effective January 15, 2002
Automotive Fuels - Maximum Retail Pump Prices -
Effective January 15, 2002
2002 01 15