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.
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?
“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.”
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For more information, contact;
George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
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