January 7, 2003
(Government Services and Lands)
Minister Noel�s meeting with Petroleum Commissioner
Government Services and Lands Minister Walter Noel met today with Petroleum Products Pricing Commissioner George Saunders to review the current volatile situation regarding petroleum prices. Commissioner Saunders made an interim price change of 5.8 cents per litre January 3 to deal with the problem of resellers refusing to supply various communities until prices were increased.
"Current legislation recognizes that circumstances could occur which would require adjustments to the regulatory model, such as occurred with the 26 per cent increase in world oil prices over the preceding two weeks," according to the minister. "Our meeting was held to give the commissioner an opportunity to explain the circumstances and discuss whether any regulatory or legislative changes may be necessary to enable him to carry out his responsibilities more effectively. The main problem seems to be how to provide for the difference in suppliers� daily rack price and their resale to intermediaries (resellers) who cannot sell above the monthly regulated wholesale price. There are a number of alternative directions available ranging from voluntary to regulatory measures to deal with this problem."
The following initiatives will now be undertaken:
The commission has achieved its mandate to bring stability to the market place since it was established 15 months ago. The legislation anticipated that extraordinary circumstances could impact on the regulatory process and was designed to accommodate such situations. Only one interim order has been necessary to date.
The PPPC continues to monitor prices on a daily basis. If there are substantial decreases over the short term a further adjustment will be made. Regulation is working. There is less volatility in pricing, and the margin between other Atlantic provinces and Newfoundland and Labrador has narrowed.
The commissioner will be making his normal price adjustments on January 15.
For further information contact Minister Noel�s office at 729-4712.
2003 01 07 4:00 p.m.