August 15, 2002
(Government Services and Lands)
The following is being distributed at the request of the Petroleum Products Pricing Commission:
Regulated fuel prices established for August15 - September 15, 2002
The situations in the Middle East and South America, along with increased motorist demand, are hitting closer to home than many consumers in Newfoundland and Labrador may realize.
The current volatile situation between the United States and the Middle East, coupled with unrest in Venezuela and a rise in world crude oil spot prices during July, has led to uncertainty in the market, thus affecting fuel prices.
The average West Texas intermediate crude oil reached nearly $27 per barrel in the U.S. in July, while OPEC and North Sea crude prices also edged higher.
From August 15 to September 15, the Petroleum Products Pricing Commission has determined that consumers in Newfoundland and Labrador will see an increase of three cents per litre (cpl) on all grades of gasoline, as well as a 1.3 cpl increase in diesel and a one cpl hike in home heating (stove and furnace) fuel. There is no change in propane from the last 30-day regulated period.
George Saunders, Petroleum Products Pricing commissioner, said consumers can take comfort that fuel prices in this province are regulated, as the situation across the country hasn�t been so stable in recent weeks with fluctuating fuel prices.
Referencing the posted fuel prices for major centres across the country over the past month, Mr. Saunders said it is evident the overall price increases for these centres have surpassed those established in this province this month. In effect, higher prices have already been passed on to consumers in most Canadian markets.
"The reason consumers don�t notice this is the fact these increases in other parts of the country have been irregular," said the commissioner.
Mr. Saunders also noted that consumers may not be aware there is an additional cost factor in the price per barrel of crude oil of approximately $3. Tagged by analysts as being a "war premium," the extra cost has been implemented because of actions by the U.S. in the war on terrorism and the threat of further violence in the Middle East.
While prices now seem to be levelling off, further crude oil price increases or unexpected refinery shutdowns could result in a further upward pressure on gasoline prices over the next few weeks. However, Mr. Saunders said the Newfoundland and Labrador market will be shielded from it during this 30-day period of regulation.
"If the commission hadn�t been established, prices for fuel would have gone up earlier and prices would have been higher," he said. "What we�ve done is stabilized the situation, and I think people will be happy about that. During the past four weeks, there have been increases of four and five cents in most major cities throughout Canada, or higher."
Mr. Saunders said the commission is considering an adjustment of the boundaries for Zone 6, which encompasses the Deer Lake and Corner Brook region.
The commissioner recently completed a fact-finding tour of the area between the Northern Peninsula and Deer Lake. During that time, he and research director David Toms met with consumers, retailers, distributors and operators of bulk storage facilities and marine terminals.
Further research will be conducted by Mr. Toms during the coming month.
As well, a marine transportation study is being carried out by the commission and its consultant � Myers Consulting in St. John�s � and is expected to be completed by the end of September.
Once the results of these studies have been analyzed, the commissioner will make a decision regarding this zone�s adjustment.
Automotive Fuels - Maximum Retail Pump Prices - Effective June 15, 2002
2002 08 15 9:40 a.m.