February 15, 2003
(Government Services and Lands)

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

Commission releases regulated fuel prices, review update

Newfoundland and Labrador has just experienced a first since the Petroleum Products Pricing Commission (PPPC) was established in 2001 - six weeks of relatively unchanged gasoline prices in an environment that has been anything but stable.

George Saunders, PPPC commissioner, said his office has been faced with many challenges in recent weeks because of the increasing volatility in the petroleum industry and its impact on prices.

Reports of skyrocketing fuel prices in unregulated markets have recently saturated the media. Crude oil has hovered above $32 US per barrel for the last month - the highest in 26 months - and it has even peaked at more than $35.

This situation has evolved from the ongoing tension between the United States and the Middle East, the fallout of a general strike in Venezuela (the world's fifth largest exporter of crude oil) since December 2, and concern over low inventories of refined products in the US. As well, a cold winter leading to a high demand has affected distillate fuel (home heat and diesel) prices.

Mr. Saunders reminds the public that Newfoundland and Labrador isn't immune to this ever-changing climate of world events, and the province's commission has enabled increases to be kept in line for the next regulation period.

Effective 12:01 a.m. Saturday, February 15, the maximum price for regular unleaded gasoline will increase by three cents per litre (cpl). Distillate fuels will also see an upward turn with diesel being adjusted by 4.1 cpl and home heating fuel at 3.53 cpl. Propane used for residential heating purposes will have a 6.4 cpl increase.

Mr. Saunders said he wants to clarify any confusion the public may have about how the PPPC sets maximum prices for refined products.

"It is based on the performance of fuel over the past 30 days (in this case, since January 12), and not on future pricing adjustments or speculation," noted the commissioner.

And given the uncertainty in the international landscape, Mr. Saunders has also issued an advisory that the commission reserves the right, through its legislation, to intervene in the normal regulatory process in the event of a military conflict and any sustained impact on fuel supply and pricing.

The PPPC is continuing the review of its regulations and pricing zones in the province.

Part of this review is meeting with stakeholders of the petroleum industry, and Mr. Saunders said he is pleased that his staff will sit down individually with representatives from all oil companies operating in the province.

These meetings will conclude by March 4, and the final report resulting from the review is expected to be ready for March 15.

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

Media contact: Michelle Hicks, Communications, 1-866-489-8800; cell: (709) 486-4789

2003 02 15     10:00 a.m.

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