May 15, 2002
(Government Services and Lands)
The following is being distributed at the request of the Petroleum Products Pricing Commission:
Effective 12:01 a.m.. today, May 15, the maximum prices of petroleum products regulated by the Petroleum Products Pricing Commission will be decreased. This includes all grades of gasoline, diesel fuel, and home heating fuels (including stove oil and furnace oil, and residential propane used primarily for home heating purposes) in all zones except those on the Labrador coast (where prices are frozen until further notice).
All pricing is based on the model for pricing adopted by the commission using Platts� New York Harbour daily pricing data. There has been only a slight decrease in the benchmark price during the past month, with the situation on world markets still fairly volatile as a result of continuing unrest in the Middle East. It is hoped that as the summer approaches, we will see some improvement and stability returning.
.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 June 15, at which time further adjustments may be required.
Please note the effective time change from previous months when 8:00 a.m. price adjustments were required. Because changes at this very busy time of the business day posed problems for many retailers, we have adjusted our pricing schedule such that commencing May 15, prices will change one minute past midnight on the 15th of each month.
During these times of price volatility, the benefits of having a regulatory commission are more evident. Without regulation, prices in our provincial market would have increased much more significantly in the past two months in particular. By applying average pricing over a fixed period, based on a structured model, petroleum prices are increased and decreased in a prudent and reasonable manner. Regulated prices are applied in a fair and transparent approach, and can be fully justified in the market.
Since the recent announcement that the state of Hawaii would regulate prices of gasoline in their market place, we have forwarded information on pricing regulation to them, and have extended an invitation to the Governor of Hawaii to visit us in order to get a first-hand look at how we operate in Newfoundland and Labrador. The commission has also received inquiries from several other jurisdictions in Canada with respect to our work here in this province.
The next scheduled date for pricing review and adjustment is June 15, 2002.
Media contact: George Saunders, Commissioner, (709) 489-8877, Cell: (709) 486-9000.
Fuels - Maximum Retail Pump Prices - May 15, 2002