March 15, 2002
(Government Services and Lands)
The following is being distributed at the request of the Petroleum Products Pricing Commission:
The maximum prices of all petroleum products in the province will see increases effective 8:00 a.m. today, March 15. This includes all grades of gasoline, home heating fuels, diesel fuel, and propane.
Residential propane maximum prices will increase by 0.5 cpl (cents per litre) for home heating purposes in all zones where propane is available for home heating.
Maximum prices of furnace oil and stove oil will increase by 1.6 cpl in all zones except those on the Labrador coast where prices are frozen for the winter months.
Maximum prices of all grades of gasoline will increase from 2.3 cpl to 2.4 cpl, depending on the zone in which you live. The variance is affected by the application of the HST of 15 per cent to the final price per liter and the rounding off effect of the tax.
The maximum price of diesel fuel will also increase from 2.0 cpl to 2.1 cpl, depending on the zone in which you live. Once more, the variance is affected by application of the HST to the final price and the rounding off effect.
These increases are based on the adopted model for pricing used by the commission, which considers average daily pricing in the month previous for petroleum products in the world markets. It is indeed accurate that prices have been quite volatile throughout the country during the past two weeks. In some jurisdictions, price increases have been significantly higher than the increase effective in our province today. In fact, some markets have higher prices than those in our province for the first time in recent memory. It is hoped that this volatility will stabilize over the coming weeks, in order to both stimulate the economic recovery reported to be under way as well as increase stability of pricing for these essential commodities.
World energy prices have been increasing steadily during the past two weeks. These increases have resulted in some sudden price jumps at the pumps in unregulated markets, notably in Nova Scotia, and Ontario, among others. In the regulated market of Quebec, where regulation is at the minimum pricing level, jumps in price have been quite significant in the past week. During the same period, U.S. markets have also experienced significant pump price increases.
During these times of price volatility, the importance of having a regulatory commission cannot be overemphasized. Without this regulation, prices in our provincial market would have soared during the past two weeks in particular. By applying average pricing over a fixed period, based on a structured model, petroleum prices are increased in a prudent and reasonable manner, and although a cost increase is incurred, it is applied in a fair and transparent manner, and can be fully justified in the market.
Furthermore, companies are still free to compete with each other below the established maximum prices set by the commission, and we certainly encourage them to do so, as they have in the past five months.
The maximum prices effective today will remain in place until April 15, at which time further adjustments may be required.
Media contact: George Saunders, Commissioner, (709) 489-8877.
- Maximum Retail Pump Prices - Effective March 15, 2002
2002 03 15 10:00 a.m.