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Tuesday, September 25, 2007

Heating oil continues to rise
Could be a long cold winter ahead

News release

St. John’s, NL, September 25, 2007- Consumers could face a long and cold winter this year if the Canadian dollar starts to falter in it’s rise against the US dollar. Heating oil spot prices are continuing to rise, in spite of gains that the Canadian dollar has made against the United States dollar, and that could prove to set the conditions for a long, cold winter for some, that’s according to George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

Canadian dollar parity
“I’ve been watching the rise of the Canadian dollar and, while it may be good that it has increased and capped the rise in spot prices, any slip in the dollar will cost Canadian consumers dearly. We’re already looking at record spot prices for heating and stove oils for this same time as other years. Heating and stove oil spots range some 7 cents a litre higher than last year. We have yet to get into refinery maintenance season when refineries shut down to switch over to production of heating oils and other distillates. That will cause a draw against available inventory and possibly increase the product in value.

Thursday’s price adjustments
“Heating and stove oils are predicted to rise by close to 1.65 cents a litre this Thursday as the Petroleum Pricing Office will set new pricing for all petroleum products and gasoline is predicted to increase by close on 7/10ths of a cent per litre. That’s with thirteen days out of a possible fourteen reporting. We’ll have the true numbers tomorrow but there are indicators of where these numbers will head this week.

The Labrador effect
“Another fear is that we may end up seeing Labrador consumers pay record amounts for heating oil if spot pricing remains high for the next month and pricing gets locked in for the winter because of ice conditions. Labradorians could be looking at record pricing for heat. Traditionally, the movement of ice affects the flow of product into that region and petroleum products pricing is frozen until the spring when shipping season to Labrador is started again.

Effects of the rising dollar on consumers
“Consumers should be fearful at this juncture of the dollars’ rise because any slippage will mean the meteoric rise in spot pricing for product. Just to give everyone the sense of what could happen: If we were dealing with the dollar at the level it was two years ago, we would be looking at close to a dollar a litre for heating oils. If there is any time that the government should be supporting the dollar, it is at this juncture. Any collapse in the dollar now would be economically devastating to the consumer.

Government and taxation
“For a long time now, consumers have expressed their feelings of taxation levels on heat and it is this direct measure that government can address the rising costs of heat through the removal of all taxes off a basic necessity of life. Heat itself, may quickly become a health concern for a lot of people this winter should the dollar fall in value or spot pricing continue to rise.”

For more information, contact;

George Murphy
Group researcher/member
Consumer Group for Fair Gas Prices

Wednesday, September 19, 2007

The ramifications of $100 a barrel oil
Consumers and industry will take a huge hit

News release

St. John’s, NL, September 19, 2007 – Rising oil prices will have detrimental effects on consumers and industry if oil prices hit the $100 per barrel mark by the New Year, that’s according to George Murphy of the Consumer Group for Fair Gas prices.

“Already, I am noticing that heating oil pricing is 10 cents a litre higher than the same point last year and that could prove to be very costly to consumers this coming winter as pricing has continued to rise along with the price of a barrel of oil,” said Murphy. “If you haven’t heard of unaffordable heating oil pricing, it’s because we haven’t gotten into the winter heating season quite yet.”

“Spot pricing for all distillate fuels is up considerably and that could lead to higher transportation costs as we get further into the distillate season. We could become witness to increases in fuel costs to move goods and services and that means inflationary pricing to the average consumer. Market analysts are already predicting only a slight retreat in oil prices before we see $100 a barrel for oil. The oil industry will try to recoup those costs and that will mean higher pricing for all refined products including heating, stove, diesel and gasoline pricing.

“The only thing that is preventing a very sharp increase in pricing instead of the moderate increases we have been experiencing is the rise of the Canadian dollar against its US counterpart. If this were two years ago, we’d be looking at an added 25 cents onto these prices as they stand now. The ramifications of any slip in the Canadian dollar now are stark and staring at the consumer and industry too. A dollar a litre for heating fuel would be disastrous to the consumer out there.
“Government, on both levels, is going to have to look at a complete removal of the tax on heat as a measure to keep consumers warm this winter. I don’t think it’s good enough to see rebate programs put in place to take care of just a few people. We all are going to have to pick up the rising costs for higher oil so, why not make it across the board and country-wide?. Rising oil pricing may be good for the government treasury but when do we get our share?

“The fact that there may be consumers out there who will not be able to afford heating fuels this winter is fast becoming both a growing health concern and a financial burden to a lot of families. Industry, particularly the transportation sectors and the Newfoundland and Labrador fishery, will have to be able to adapt and deal with rising fuel costs as well as high dollar value and transportation issues. The rising costs of oil to electrical companies that generate electricity by burning oil will also have to recoup costs from the consumer as well. What are the side-effects of that on the people of Labrador?

“It’s still a little early to predict where this winters heating/stove oil season will be going this year but, so far, it does not look good. With pricing for heating oils already ten cents a litre higher than the same time last year and the promise of a rising oil price, the ramifications are obvious. In spite of recent builds in distillate inventories ahead of refinery maintenance season, there is a distinct possibility this time around that we could see pricing well over last years numbers. The only thing that could stop what will happen is recession and, I’m thinking we’re close to the edge of that now.”
For more information, contact;
George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Tuesday, September 11, 2007

Gasoline prices to stay steady
Heating and stove oils to increase

News release

St. John’s, NL, September 11, 2007 – Consumers in Newfoundland and Labrador will not see any major increase in gasoline pricing but users of heating and stove oils are advised to get ready for increases. The Consumer Group for Fair Gas Prices is advising home owners and users of distillates like heating and stove oils to get ready for increases in their respective products.

“Gasoline numbers are showing a modest two tenths of a cent increase while heating and stove oil users will be looking at close to 2.3 cents a litre up this coming Thursday morning. Those numbers are with twelve out of fourteen available data days,” said George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

“This is the time of year where the focus has switched from gasoline to users of distillates like heating and stove oils. Even jet fuels are showing added demand and that may add to future increases as that fuel is added as an antifreeze agent during winter months. We’re advising consumers to shop around this heating season. Some companies offer insurances and maintenance programs that rival other companies but pricing of heating and stove oils can vary greatly and that’s where the consumer can win big.

“Gasoline spots are showing a difference of eight cents a litre against last year while heating/stove oil numbers are six cents a litre higher. That could mean trouble if we don’t see a build in distillates before the weather turns colder. I think that consumers are probably a little more concerned with the costs of heat as heat is a health concern unlike gasoline.
***Note to readers: As of the 12th, I have numbers that show an allowable increase in heating and stove oils by 2.62 cents a litre while gasoline shows an allowable increase of 15/100ths of a cent, not including the tax component.That's based on 14 out of the possible 14 busines days that are available. Unknown as to why the Public Utilities Board numbers are so far out of whack with mine.
I'll still stand by mine however!

Editors: Please note the change in contact information.

For more information, contact;

George Murphy
Group researcher/MemberConsumer Group for Fair Gas Prices