January 15, 2004
(Government Services and Lands)


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

Regulated maximum fuel prices released for Newfoundland and Labrador

High prices and colder weather, along with an increased demand in the face of low supplies dominate the synopsis of world fuel-pricing activity over the past 30 days.

For Newfoundland and Labrador, these factors combine to mean an overall increase in the prices of fuels regulated by the Petroleum Products Pricing Commission (PPPC). However, commissioner George Saunders noted that the recent strong performance of the Canadian dollar has helped to offset these increases.

"The Canadian dollar factors into our calculations for regulated fuel pricing, and the public should realize that because of our strong dollar, we have been shielded from what would have otherwise been a dramatic increase in fuel prices," said the commissioner, adding that regulation has also provided stability in this province during what continues to be a volatile world market.

The changes in price for regulated fuels in Newfoundland and Labrador effective 12:01 a.m. Thursday, January 15 are as follows: all types of gasoline will increase by 2.2 cents per litre (cpl); diesel moves upward by 2.5 cpl; home heating fuel is also being adjusted � furnace oil by 2.23 cpl and stove oil by 2.37; and, residential propane used for home heating purposes will rise by 2.8 cpl.

Fuel prices continue to be frozen at November 15, 2003 levels in Zones 10a (Mary�s Harbour to Cartwright), 11 (Coastal Labrador South) and 14 (Coastal Labrador North).

Mr. Saunders explained that at the forefront of elevated fuel prices is the fact that oil on the world market averaged well above $30 US a barrel mark during the past 30 days.

Also driving fuel prices to highs not seen since before the war in Iraq this past March was the onset of colder-than-average winter temperatures throughout areas not normally affected by a deep freeze followed by dips along the northeast coast (among the largest consumers of heating oil). This activity, in turn, has created a heightened demand for distillate fuels (home heat and diesel) that are reported by the US Energy Information Administration (EIA) to be at their lowest levels since the 1970s.

"Right now we are going through a high pricing period, especially for home heating fuel, and that�s to be expected because we are also experiencing a peak demand stage during these colder months of the year," said the commissioner. "This activity is putting pressure on inventories, and with supplies being their lowest in years, a high price has resulted."

The global fuel situation is also keeping gasoline prices on the rise at a time when the traditional peak demand season for this product has passed.

"A recovering world economy continues to stimulate the demand for gasoline during the time of year that is usually considered an off-peak period," said Mr. Saunders. "Gasoline supplies are also low, as refiners have shifted production to distillate fuels, and that too is causing high prices."


Arrangements have been made for Mr. Saunders, as well as research director David Toms, to participate in the Measurement Canada Retail Petroleum Trade Sector Review in Montreal January 28-29.

The federal agency is hosting a series of stakeholder discussions on issues related to the petroleum industry and measuring equipment, and invited representation from the commission. Poor weather prevented the PPPC staff from attending the sessions in Halifax last month, but additional meetings have provided another opportunity to make their views known.

"We are looking forward to having the chance to speak on several petroleum-related issues, particularly fuel-pump calibration and federal support services in Newfoundland and Labrador," said the commissioner. "We believe more should be done to ensure that people in Newfoundland and Labrador are receiving what they pay for when it comes to petroleum products."

Other topics of interest to be discussed at the review�s stakeholder meetings include measurement standards, device approvals, initial and subsequent inspections of devices, service providers, complaint/dispute process, and alternate service delivery.


The PPPC has concluded carrying out its province-wide fact-finding tour, and the initial phase of the tour and inspection initiatives for the province have now been completed.

Part of the PPPC�s mandate is to conduct site visitations throughout the province and ensure that retailers and wholesalers are registered with the commission�s ever-growing database and they are in compliance with regulations. It also provides an opportunity for stakeholders in the petroleum industry to speak directly with staff members and raise concerns or questions.

"These fact-finding tours are invaluable to our work here at the commission," said Mr. Saunders. "The initial phase may be complete, but we will continue to carry out site inspections of fuel prices and gather information to further our research into the fuel delivery network in the province."

Media note: For background information on the Measurement Canada review meetings, please visit the PPPC Web site at under PPPC News Releases, December 1, 2003 and December 9, 2003.

1. Automotive Fuels Maximum Retail Pump Prices - Effective January 15, 2004
2. Heating Fuels - Residential Propane Maximum Tank Wagon Prices - Effective January 15, 2004

3. Heating Fuels Maximum Tank Wagon (or ** Tank Farm) Prices - Effective January 15, 2004

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

2004 01 15                                       9:25 a.m.

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