June 30, 2003
(Government Services and Lands)


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

Commission calls for land transportation study proposals

Newfoundland and Labrador�s land transportation system is about to undergo a close examination, once the contract for a study is awarded by the Petroleum Products Pricing Commission (PPPC).

George Saunders, PPPC commissioner, said the terms of reference for a land transportation study have been finalized and a request for proposals from qualified consultants has been tendered.

The study calls for a review of the current petroleum distribution system and will include recommendations on how, or if, the commission can improve the structure of its pricing zones to ensure the utmost fairness to all stakeholders.

Mr. Saunders explained that the commission initially established the province�s present 14 pricing zones based on historical data and industry consultations relevant to pricing differences throughout Newfoundland and Labrador.

"From the outset, the PPPC zonal boundaries were set up based on solid research on historical pricing and conclusions as to why prices would differ across various geographic regions," said Mr. Saunders. "These premises have to be validated, and it takes time to do that thoroughly. This study will provide definitive information on the costs relevant to the distribution of petroleum products throughout the province."

The PPPC initiated its research of the distribution network with a Marine Transportation Study that examined the costs of delivering fuel to the various marine terminals from outside the province. The findings and recommendations of the study were released this past March, with the understanding that a land transportation study would follow.

"This land transportation study should give us a valid cost analysis, as this is one of the most significant factors that impacts on zone boundaries and pricing within these regions," noted the commissioner. "As well, the distribution network in the province has undergone some changes over the past five years as a result of companies� restructuring programs, and these changes will be examined in this study."

The request for proposals closes Monday, July 21, and the study is expected be ready for release before the end of 2003.

Media contact: Petroleum Products Pricing Commission, Tel: 1-866-489-8800; (709) 489-8877.

2003 06 30                                       9:45 a.m.

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