Gasoline prices to drop
Drop in refiner capacity makes consumers pay

News release

Paradise, NL, June 19, 2007- Gasoline will come a little cheaper for consumers in Newfoundland and Labrador this week as prices are forecast to drop by a rough 3.3 cents a litre with 13 days out of 14 to report from, that’s according to George Murphy of the Consumer Group for Fair Gas Prices. Heating and stove oils are showing an increase of close to 6/10ths of a cent over the same time period.

“A look at the numbers from last weeks inventory data shows that Big Oil is making consumers pay for their past folly. We’ve seen Big Oil pay out big money to shareholders rather than make the strategic investments in refineries maintenance. Every time we see a refinery outage, we see the fruits of that. If refiner capacity drops against consumer demand, they still win,” said Murphy.

“Right now, Big Oil is heavily dependent upon foreign imports of refined product. That will be a strategic mistake to the consumer if demand picks up in other centres where this refined product is coming from. If the markets lose these imports to the North American market, we could see some sharp rises in pricing to the consumer. Because they’re not refining enough to keep up with demand and relying heavily on imports, we’ve effectively seen the creation of a ‘house of cards’ on the markets that the consumer could end up paying for in the end.

“Refinery capacity dropped in an Energy Information Administration report from last week. Numbers last week showed that capacity dropped in the gasoline demand period to fall to 89.2 per cent. While the same report showed a very modest growth in gasoline inventory, the numbers remained very bullish to traders. Numbers for the rest of the regulation period started to trade up again erasing some of last weeks predicted five cent drop at the pumps that should have happened.

“What is odd with the increase on heating and stove oils is that demand for distillates has increased over the same period last year. I’m still worried that there is going to be a sustained increase in heating and stove oils this winter if Big Oil doesn’t address refining problems. We’re still not seeing big increases in inventories of that fuel group, nor are we seeing drops in the cost price of those fuels. Spots are a rough two cents over what they were for the same timeframe last year.”

“People should be concerned that numbers for heating and stove oils aren’t backing down the way they normally would. This is the time of year that we’ve seen those figures back down but they aren’t. If this keeps up and nothing changes, we’ll be back into relief programs for those who can’t afford to pay for heat again and governments will be forced to act in response to Big Oil’s folly. We’re getting too dependent upon foreign imports to catch us when the markets are failing us.”


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For more information, contact;

George Murphy
Group researcher/Member

Standing by my numbers
Prices should have dropped to consumers-PPO needs to explain

News release

Paradise, NL, June 14, 2007- “Pricing to consumers in Newfoundland and Labrador should have come down and the Petroleum Pricing Office needs to explain why they never,” according to George Murphy, group researcher and member of the Consumer Group for Fair Gas prices.

“I know my numbers were solid this time around. Numbers from the markets after weekend trading showed a solid 4.37 cents a litre down (5.0/Litre taxes in) and they held that trend right up to Tuesday trading close. Markets showed a 5.1 cent a litre drop coming then. I know my numbers were right and I’ll stand by them. Consumers should be looking at five cents a litre down this morning but they aren’t. My numbers fall well within the requirement of four cents a litre up or down in movement for the interrupter formula to work,” said Murphy.

“Other centers like Nova Scotia and New Brunswick saw pricing drop well below what we have here and that’s now all out of sync. Traditionally, what I have noticed was that we would follow in price drops and be close to what pricing would be in those provinces. If they’re using New York Mercantile Exchange numbers, then there is something wrong here. All three of my sources can’t be wrong.

“The last three price changes were just about dead on. Two weeks ago showed they were dead accurate while last week’s price change was out by 2/10ths of a cent. I work on a margin of error of 3/10ths. My numbers exceeded that this week, enough to show interruption and that resulted in the predicted drop coming at the pumps. Rather than miss this one by three tenths, I must have missed this one by a couple of extra hundredths. Frankly, I’m disappointed that the companies just didn’t drop prices ahead of schedule while the impetus is there. If there is any good news it’s that we’re still on track for a 5.1 cent a litre drop next week with eight days out of a possible 14 recorded.”

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For more information, contact;

George Murphy
Consumer Group for Fair Gas prices

Go light on the golden stuff
Gasoline to drop this coming Thursday if the numbers hold today

News release

Paradise, NL, June 12, 2007- Unless there is a drastic increase in the price of gasoline in the markets today, it is likely that consumers will catch another break at the pumps as the Petroleum Pricing Office will have to use their interrupter formula, that’s according to George Murphy of the Consumer Group for Fair Gas Prices.

“Good builds in gasoline inventories over the past three weeks have taken some of the early worries on high summer pricing out of the markets, at least for this week and that is going to translate into a five cent drop at the pumps this coming Thursday morning if the numbers hold so, word here is ‘go light on the gold stuff’,” Murphy said.

“This interruption will bring our spot pricing average down towards the 60 cent a litre basic cost price for gasoline. Gasoline pricing in the markets will have to trade at 65 cents a litre today for any decrease not to happen. This decrease is representative of what Big Oil has seen in the markets; consumers hitting that brick wall on pricing. Demand didn’t show any strong increase to match what was being added to inventories. Demand numbers showed a 1.5 per cent increase against last years’ numbers, a number that showed some weakening against the inventory build.

“While we have already hit a new all-time record on pricing, it doesn’t mean that we’ll see continued drops in pricing. We could see a reversal of this downwards trend as people start their summer vacations. We’re not ready to ease back on warnings of record pricing this summer quite yet although any continued build in inventories would be of benefit to the consumer. If prices drop this week, it would bring pricing down to levels last seen a year ago. That still is reflective of the predicted pricing range that we’ve hit once already.”
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For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
(709)782-8053
(709)685-6186 cellular

This could get interesting...

Gasoline to drop...Again?...

Call it what you will, but the fact that U.S interest rates are on the rise just might be of benefit to consumers here in Newfoundland and Labrador this week and possibly other gasoline users in other provinces.

Why?

U.S interest rates are rising because demand for some consumables is dropping. If that happens, as in all likelihood they are, then it may be a sign that inflation is increasing. If that is so, then watchers are predicting a drop in demand of petroleum products.

Of course, a good build in gasoline inventories this week also did its little part in bringing this about.

So far, with five out of a possible seven days data available, it looks like Newfoundland and Labrador consumers are looking at a possible drop at the pumps of a nickel. Could be more than that if Monday and Tuesdays' trading days also figure lower.

Be warned of a possible price drop this week...That's a change isn't it?...

Thought so.

Go light on the liquid gold for now. I'll have more in a release sometime on Tuesday to all the media in our neck of the woods.

Regards,

George

Still pointing "down"

After twelve days out of a possible 14, gasoline pricing is still projected to show a modest drop to Newfoundland and Labrador consumers.

A moderately good inventory report from the Energy Information Administration in the United States this week shows that, while refiner capacity may not have increased, inventories of gasoline showed a slight increase for the second week in a row. Hopefully, this coming Wednesday's report will show a third consecutive.

A "brick wall" has been hit this last couple of weks it seems. Maybe consumers are finally getting the conservation message and maybe they've come to realize that the prices they were seeing at the pumps simply weren't justified under any conditions.

What you did see the past couple of weeks was the realisation that inventory shortfalls and refiner capacity have come into question and they both remain as proof of the oil companies will to manipulate supply and demand. Because they've cut back on the number of operating refineries, they can't produce what the market needs. Because they didn't sink money into refinery maintenance, any shutdown only added to the upwards spurt in gasoline and heating oil spot prices.

Either way, for Big Oil, it's "win-win".

Anyways, if you're in Newfoundland and Labrador, so far we're looking at 3.8 cents a litre down at the pumps with two business days to go. Heating oils and stove oils both show a rough half cent down.

Here's hopin'!...

Regards,

George