January 15, 2003
(Government Services and Lands)


The following is being distributed at the request of Petroleum Products Pricing Commission:

Fuel prices set for next 30 days

The province�s Petroleum Products Pricing Commission (PPPC) has resumed its regular schedule of establishing monthly maximum fuel prices.

Effective 12:01 a.m. January 15, the price of regular unleaded gasoline will remain unchanged or see a 0.1 cent per litre (cpl) increase (depending on the rounding-off impact of the HST in a particular pricing zone). Diesel will be adjusted by 0.8 cpl, while home heating fuel moves upward by 0.68 cpl. These prices are based on market conditions from December 28 to January 11.

Residential propane used for heating purposes, which is regulated in this province under a different system than other refined petroleum products, shows a 2.8 cpl increase over the price established December 15, 2002.

George Saunders, PPPC commissioner, said he is pleased to see fuel deliveries for many Newfoundland and Labrador communities have been restored, and steps are being taken to try and prevent further interruptions.

Extraordinary circumstances during the latter part of December saw world fuel prices spike dramatically in a short period of time. These events quickly led to the notification of a fuel supply suspension for remote communities in Newfoundland and Labrador. In several instances, the commission was advised the situation had reached the point where communities were without fuel. This had to be immediately addressed by the PPPC.

Resellers, who purchase fuel on a daily rack price from oil companies, informed the commission they wouldn�t supply remote areas of the province in the new year because they were buying fuel at a much higher cost than they could sell and deliver it.

On January 3, the PPPC issued an interim order that fuel prices be adjusted to address this serious situation instead of waiting until the usual regulation date of January 15. "The commission had to ensure a safe and secure supply of fuel to the hundreds of communities that would have been cut off, and in some cases still be without fuel, if we hadn�t done what we did," said the commissioner. "Regulation is working in this province, and the people in Newfoundland and Labrador can be assured this commission is working diligently to guarantee a balanced and fair system when it comes to petroleum products and prices."


A meeting with Government Services and Lands Minister Walter Noel January 7 resulted in several recommendations to enable the commissioner to carry out his mandate more effectively.

Mr. Saunders noted a review of the PPPC�s regulatory model, which includes an examination of the province�s 14 pricing zones (and sub-zones), is currently under way.

To facilitate the review, the commission has contacted all resellers in the province and requested information on communities where there is only one fuel supplier. As well, the PPPC has written oil companies and invited them to meet individually to discuss the regulatory model.

Mr. Saunders said the commission has also asked representatives of the Consumer Group for Fair Gas Prices to meet and discuss their issues.

1 Automotive Fuels - Maximum Retail Pump Prices - Effective January 15, 2003
2 Heating Fuels - Residential Propane - Maximum Tank Wagon Prices - Effective January 15, 2003
3 Heating Fuels - Maximum Tank Wagon (or ** Tank Farm) Prices - Effective January 15, 2003

Media contact:
Michelle Hicks
Communications officer
Tel: (709) 489-8837/8877
Toll-free: (866) 489-8800
Cell: (709) 486-4789 (voice mail available)

2003 01 15                                          9:10 a.m.

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