September 15, 2003
(Government Services and Lands)
The following is being distributed at the request of the Petroleum Products Pricing Commission:
Commission releases maximum prices for regulated fuels
World markets eased slightly from the heightened activity that took place over the past 30 days, particularly as it related to gasoline.
And though the decreases in prices aren�t as significant as the recent increases, George Saunders, commissioner for the Petroleum Products Pricing Commission (PPPC), said gasoline prices are gradually making their way down. How long this trend will last, he cautioned, is difficult to determine.
Effective 12:01 a.m. Monday, September 15, the maximum price for all types of gasoline (based on figures since August 28, when the commission made an early adjustment to prices) will decrease by 3.3 cents per litre.
Distillate fuels (home heat and diesel), which haven�t been adjusted since August 15, will see a slight decrease. Home heating fuel prices will decline by 0.78 cpl, and diesel is changing 0.9 cpl.
Residential propane used for home heating purposes, which was also unchanged since August 15, will see an upward movement of 1.5 cpl.
Mr. Saunders noted that the markets have declined slightly over the past week where prices dropped but not in the same way as they had increased. These decreases weren't enough to activate the commission�s interruption formula, and this is why prices haven't changed until now.
There were days when there were drops, but they were offset by increases," he said. "The market is behaving in a declining manner, and we are watching this very carefully. It can�t be stressed enough that if there are large decreases in prices and our interruption formula criteria are met, then we will adjust prices appropriately before the 15th of next month.
"Contrary to some of the comments we are hearing from the public, consumers need to realize we don't just interrupt when the prices are on the rise."
The change in prices is indicative of the shift in seasonal demand for petroleum products on the world markets.
Throughout the summer, an increased demand for gasoline was challenged by lower-than-normal inventories, which was a major factor driving these prices upward. However, that demand is slowly declining and supplies are improving, and this has created a rollback in pricing.
The home heating season is a little less than a month away for people living in North America, and the demand for distillate fuels isn�t putting pressure on the markets at this time. Inventories � though still below normal because of last year's harsh winter � are continuing to build and they are able to meet current requirements.
The past 30 days has seen an ongoing demand for propane along with an above-average stock rebuild to attempt a recovery from last year's colder-than-normal winter. But during this period, the summer season was still in full swing, and the travelling public continued to use the fuel for their recreational vehicles, barbecues and the like. This created an upward pressure on price.
It should be noted that this kind of propane use isn�t regulated in Newfoundland and Labrador, but the product when used for home heating is; therefore, the maximum price as set by the PPPC had to be adjusted.
Mr. Saunders said other factors also affected petroleum prices, such as the continued delay in the return of Iraqi oil to pre-Middle East war levels, as well as the supply disruptions from Venezuela and Nigeria (the strike at the Royal Dutch/Shell Group - the country's biggest foreign oil producer - has ended).
Fuels - Maximum Retail Pump Prices - Effective September 15, 2003;
Media contact: Michelle Hicks, Communications. Tel: (709) 489-8837. Cell: (709) 486-4789.
2003 09 15 9:30 a.m.