August 28, 2003
(Government Services and Lands)


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

Coastal Labrador tour productive for fuel regulation staff

The Petroleum Products Pricing Commission (PPPC) staff�s recent excursion to coastal Labrador was all they hoped it would be and more. Between August 18-20, George Saunders, PPPC commissioner, along with researchers, David Toms and David Hillier, were accompanied by Wayne Broomfield of the Department of Labrador and Aboriginal Affairs for a three-day tour of several Labrador communities. They spent time in Rigolet, Postville, Makkovik, Hopedale, Nain, Churchill Falls, Cartwright and Black Tickle.

The trip was both informative and enlightening, and the commissioner said he was glad the PPPC staff were able to meet their objectives: get a first-hand account of the petroleum distribution network, meet with the managers and operators of each station, and hear about any issues unique to these regions.

Several matters were raised during the contingent�s meetings with local community councils and representatives, all of which Mr. Saunders said his office will bring to the attention of the appropriate government departments.

The commissioner noted that his office will do what it can to address the concerns raised, but there are some issues for which the PPPC has no control, such as the situation in Rigolet.

The main issue there was the threat to the community�s fuel supply because there are difficulties in finding a local retailer. Because the supply problem is not petroleum-price related, the commission�s role is limited.

A recurring theme during the Labrador visit was the number of fuel deliveries per year and price freezing. In most communities there are only two deliveries (November and June/July). The commission freezes prices for these areas in November and then thaws them in spring depending on when deliveries resume.

But community representatives asked the commission to consider a two-pricing system where prices set in June/July are based on maximum regulated prices at that time, and again in November based on current prices with no fluctuations in-between.

"There is an inherent risk with this proposal in that if there�s a decline in market prices during the summer months, they won�t get the advantage of the declining price," explained Mr. Saunders.

Setting two prices in that manner can also become problematic when some communities, such as Makkovik and Nain, receive four deliveries per year.


Mr. Saunders said he was also made aware of the public�s concern about gas pump calibration.

This is something that is outside of the commission�s jurisdiction and is a matter for the federal government�s Measurement Canada, he explained. The commissioner said he will make the department aware of the concerns, and will ask them to ensure the proper inspections are carried out on these pumps.

"We�ve had numerous reports about discrepancies with gas pumps throughout the province, and all we as a commission can do is make the appropriate agency aware of it and ask them to ensure all is in proper working order," said Mr. Saunders.

Environmental issues, including age and condition of fuel storage tanks and the quality of fuel, were brought to the PPPC staff�s attention, and these concerns will be forwarded to the provincial Department of Environment for investigation.

Fuel prices in Labrador and taxation were among other topics, and Mr. Saunders said he explained the fuel costs are such because when there are high transportation costs with low turnover rates, there will be a higher priced fuel excluding tax. Taxation is outside the commission�s jurisdiction.

Overall, Mr. Saunders said communities were receptive to the PPPC staffs visit, and he believes they have a better handle on the issues in the entire region. As well, the people there have a more thorough understanding of the commission�s work.

Recommendations will be included in a final report that is expected to be completed in approximately in a month. Any communication on the issues raised will be copied to each community council and the respective petroleum companies.

Media contact: Michelle Hicks, Communications. Tel: 1-866-489-8800 or (709) 489-8837. Cell: (709) 486-4789.

2003 08 28                                        9:30 a.m.

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