April 8, 2003
(Government Services and Lands)
The following is being distributed at the request of the Petroleum Products Pricing Commission:
Commission adjusts gasoline prices
George Saunders believes the interruption formula developed by the Petroleum Products Pricing Commission (PPPC) is working as it should to keep fuel prices in line.
The commissioner said the formula, which was introduced March 15, was designed to create a stable environment in a timelier manner for fuel prices in Newfoundland and Labrador in the face of major and sudden fluctuations on the world scene.
Since the commission implemented the new pricing rule, a war started in the Middle East and there was a seasonal shift in the demand for some refined petroleum products. These actions have created a continuous volatility in the world market.
Consequently, the PPPC research staff has determined that the criteria outlined in the interruption formula have been met at this time for gasoline only, and a price adjustment for these fuels is warranted.
Effective 12:01 a.m. Tuesday, April 8, 2003, the maximum price for all types of gasoline will drop by 3.4 cents per litre (cpl).
The criteria for adjusting distillate fuels (furnace oil, stove oil and diesel) and residential propane weren�t reached this week, and there will be no change in prices.
Mr. Saunders cautioned that while the PPPC formula has meant recent price decreases for some fuels, the situation can move in the other direction at any time if the conditions are met.
He explained declining gasoline prices can be attributed to several factors, with the overall decline in oil prices on the world market being at the forefront.
As well, many refineries have shifted their production from home heating fuel to gasoline, which has resulted in an increase of supplies. This move has been met by a stable demand, and it has created a downward pressure on the price.
"We are in the midst of a major war, and there is such uncertainty when it comes to investments and pricing in the markets on a daily basis," noted Mr. Saunders. "We want to ensure the impact of such events is translated as fairly as possible in this province. It is our hope that long-term stability will return soon to fuel prices on the world scene."
Mr. Saunders also pointed out the commission will establish the maximum prices April 15, as per its regular schedule.
Media contact: Michelle Hicks, Communications: 1-866-489-8800; cell: (709) 486-4789.
2003 04 08 9:00 a.m.