The following statement was issued today by George Sweeney, Minister of Government Services and Lands. It was also read in the House of Assembly:

Update on Petroleum Products Pricing Commission

I rise in this house today to provide an update to members of the house regarding the Petroleum Products Pricing Commission.

The commission was established in May of 2001 and began regulating fuels in October of that same year. Since that time, the commission has made monthly price adjustments which has ensured price stability for consumers.

Following concerns about an unexpected jump in fuel prices this past January, my department directed the commissioner, George Saunders, to conduct a review of the pricing model to determine if any adjustments were required.

This review took place from January 8 to March 7. Mr. Saunders met with oil companies, consumer groups, resellers, and other stakeholders, and presented a report of his findings to government and the public on March 12.

This proved to be a very worthwhile activity, uncovering several areas which required improvement. One initiative which was implemented following the review process is an interruption formula. Under this formula, the commissioner can change prices by following set criteria which warrant a price interruption.

In fact, due to instability in world prices as a result of the war in Iraq, the commission has altered prices three times since March 15. These changes have resulted in massive decreases in the price of fuel for consumers. For example, since March 15, the price of home heating fuel has been reduced by approximately 15 cents per litre. This accounts for a substantial savings when filling an oil tank which can hold hundreds of litres.

This interruption formula has also insured the financial viability of small local resellers in rural areas. In the past, the lack of price adjustments during times of instability in the world marketplace put significant strain on this group.

Other recommendations were also made as a result of the commissioner�s review process. These reforms require amendment of the Petroleum Pricing Act. I will table a bill before the house this spring.

I am pleased to report that my department is confident that the regulation of petroleum prices has been a worthwhile initiative which functions for the benefit of consumers. The mandate of the commission has been to provide fair, stable prices for the public. I believe that this mandate has been met.

2003 04 10                                       2:05 p.m.