Break at the pumps coming
Heating and stove oils also expected to drop

Media release

St. John’s, NL, January 29, 2008- Consumers in Newfoundland and Labrador will see some slight downwards adjustments in all major petroleum groups this week, that’s according to the Consumer Group for Fair Gas Prices.

“From the look of the numbers, consumers can expect to see a decrease of three cents per litre on gasoline and 2.49 cents down on stove oils. The stove oil number will probably be a good indicator of where heating oils will also be going. I also expect to see gasoline drop further than what I have recorded for the last twelve days because of the disparity we saw in the last adjustment session. I think consumers should see somewhere in the area of four cents a litre down on gasoline just to keep up with what has happened in other markets last week,” said George Murphy, researcher for the group.

“Last adjustment period we saw the PUB allow an increase of 1.3 cents per litre while our numbers showed a 1.3 cent a litre drop. I’m expecting the PUB to come out with new numbers that allow for a larger than expected drop from the numbers that I have just so they can “catch up” to what has happened in the markets and match the reality that was reflected in the conditions at the time of last adjustment

“A good build in gasoline and crude oil stocks last week helped in the downwards turn in crude prices. That and a few words of warning about a possible start to a recession both impacted crude and related commodity prices. People are getting a little warning out there that high energy prices have started to impact economies and personal finances.

“The International Energy Agency has also lowered its expectations of energy demand saying that they expect crude oil demand to falter somewhat in the coming weeks. That has also played into the markets. Some rumblings of a possible economic slowdown are also coming from China which has the world’s fastest rising economy.

“Heating oil prices should also feel the effect of the downwards pressures being felt on jet fuels. Demand for jet fuels has dropped, ranging some four per cent below year ago levels. Hopefully, the numbers will reflect the trend in jet fuels and consumers can get that advantage in the form of lower heating oil pricing. Heating oil spots are still 19 cents a litre higher than last year for the same timeframe.

“While we are still well down in crude inventories as compared to last year, gasolines are almost at “year ago” levels. Demand there has steadied at a rough one per cent over the same timeframe last year. The problem here is that the average spot price for gasoline still remains some 17 cents a litre higher than the same time last year. That should bring cause for summer pricing concerns if we don’t see higher builds in inventories or a drop in winter demand.”

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For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
gasprices@hotmail.com