June 16, 2003
(Government Services and Lands)
The following is being distributed at the request of the Petroleum Products Pricing Commission:
Commission releases June 15 regulated fuel prices
Minimal changes to regulated fuel prices, a lift in the price freeze for coastal Labrador and an adjustment in prices for Bell Island have been the major focus for the Petroleum Products Pricing Commission (PPPC) at this time.
In the case of regulated fuel prices, a wide range of activity on the world market over the past 30 days saw prices May 12 (the first date used to calculate figures for this period of regulation) start off at a lower level, but then increase to 12-week highs during the past week or so.
The driving factors for this price variation include: speculation about what OPEC (Organization of Petroleum Exporting Countries) was going to do at its June 11 meeting in Doha, Qatar; seasonal demand for products with lower-than-normal inventories; two fires at major refineries in Louisiana; and, increasing production levels at refineries to try to rebuild stocks.
However, for Newfoundland and Labrador, the average result of this activity over the past 30 days has meant an overall balance in prices that are reflective of normal market conditions and relative stability.
Effective 12:01 a.m. Sunday, June 15, 2003, the maximum price for all types of gasoline will remain unchanged. Prices for distillate fuels will decrease � home heating fuel by 2.01 cents per litre (cpl), and diesel by 2.1 cpl. Residential propane used for home heating purposes will see an increase of 1.5 cpl.
Mr. Saunders said it is evident that pricing stability is being achieved in Newfoundland and Labrador when unregulated markets are seeing marked fluctuations in pricing, and this province is maintaining a status quo for gasoline and minimal movement in the other fuels.
"Current fuel prices on the world scene are higher than they�ve been in some time, but because of our pricing model, we are able to maintain stability in Newfoundland and Labrador for most fuels," he said.
The Labrador marine service began operation this past Monday, and it is now possible for fuel deliveries to occur at any time.
Consequently, the PPPC has decided to lift the price freeze that has been in effect in coastal Labrador areas since November 15, 2002. Prices will be adjusted to reflect current market conditions and factors associated with delivering fuel to this portion of the province.
Fuel prices in Zones 10a (Mary�s Harbour to Cartwright), 11 (coastal Labrador � south) and 14 (coastal Labrador � north) will see decreases - all types of gasoline by 4.4 cpl; diesel by 4.5 cpl and home heat by 3.35 cpl.
Mr. Saunders and research director David Toms are meeting with Happy Valley-Goose Bay�s town council Tuesday, June 17 at 4:30 p.m. to discuss their inquiry about implementing a price freeze in that area.
At that time, the commission will present historical data to the council about pricing for the province, as well as information about the implications freezing prices would have there.
An investigation into fuel prices for Bell Island (Zone 1a) has resulted in a 0.5 cpl decrease in gasoline and diesel effective June 15.
Mr. Saunders explained that the PPPC staff looked into the matter at the request of the Town of Bell Island.
After a thorough investigation during the month of May, as well as consultations with town officials, the municipal accountant and the petroleum companies, the commission determined that the differential between Zone 1 (Avalon) and Zone 1a (Bell Island) warranted a downward adjustment because of changes to market conditions on the island.
Home heating prices will require further examination, noted Mr. Saunders, and this will be achieved through an upcoming land transportation study being carried out by the commission.
The terms of reference for this province-wide study have been completed, and the commission will issue a call for proposals from qualified consultants before the end of June.
"This study aims to improve our knowledge base with respect to the accuracy of costs associated with distribution and storage of petroleum products," said the commissioner. "The outcome could have implications for our zonal boundaries as they currently exist and pricing in the future."
1. Automotive Fuels
- Maximum Retail Pump Prices - Effective June 15, 2003;
Media contact: Michelle Hicks, Communications. Tel: 1-866-489-8800; (709) 489-8837; Cell: (709) 486-4789.
2003 06 16 10:00 a.m.