February 16, 2004
(Government Services and Lands)
The following is being distributed at the request of the Petroleum Products Pricing Commission:
Adjustments occur on all regulated fuels in province
Regulation has maintained stability in fuel prices over the past 30 days in Newfoundland and Labrador, despite the numerous challenges brought on by significant price spikes on the world market.
Throughout the period used by the Petroleum Products Pricing Commission (PPPC) to calculate February 15 figures, several factors were at work to drive world prices to highs not seen since the beginning of the U.S.-led war in the Middle East last March.
Following January 12 reports released by industry, analysts showed that relative oil supplies available on the United States (U.S.) market dipped to low levels while, at the same time, persistent cold temperatures along the northeast coast increased demand for fuels, especially home heating products (this region consumes three-quarters of the U.S. heating fuel supply).
The resulting pressure on prices for refined petroleum products was reflected on NYMEX (the New York Mercantile Exchange) � the world�s largest commodities futures exchange, which is used by the commission as the standard measure of price.
"The public should be aware of the fact that world prices for refined petroleum products have continued to remain high overall during the past 30 days, and this is partly because of the seasonal behaviour in the market," noted George Saunders, PPPC Commissioner. "But prices had elevated so much that we nearly had to implement our interruption formula to intervene early and adjust this province�s prices. However, the situation on the world market eased, and we didn�t need to move prices before February 15.
"I have to stress that the awareness of a potential future intervention has to remain. We are far from seeing an end to our winter and, besides the normal demands of the season, anything unexpected could occur to drive prices beyond what we�ve seen to date."
The maximum prices for regulated fuels in Newfoundland and Labrador effective 12:01 a.m. Sunday, February 15 will increase as follows: all types of gasoline by 3.1 cents per litre (cpl); diesel by 1.7 cpl; home heating fuels � furnace oil by 2.11 cpl and stove oil by 1.08 cpl; and, residential propane use for home heating purposes, by 1.3 cpl.
The commissioner said although today�s maximum regulated prices are high, it should be noted that they are all lower than the prices listed for the same period a year ago. "I can say with certainty that, if Newfoundland and Labrador weren�t in a regulated market, the public would have experienced the same massive fluctuations in prices that occurred elsewhere in unregulated markets during this period," said Mr. Saunders.
Gasoline continues to see an upward pressure on its price because there are concerns about reportedly low inventories and the possibility the stocks may not rebound in time to meet the upcoming seasonal demand.
Fuels Maximum Retail Pump Prices - Effective February 15, 2004
Media contact: Michelle Hicks, Communications. Tel: (709) 489-8837 or 1-866-489-8800; cell: (709) 486-4789.
2004 02 15 10:10 a.m.