Consumers to expect another hit at the pumps

Media release

St. John’s, NL, February 26, 2008- Consumers in Newfoundland and Labrador will see another increase to heating, stove oils and gasoline prices before they see any mitigation in pricing, that’s according to George Murphy of the Consumer Group for Fair Gas Prices.

What consumers will see
“Consumers can expect to see another 3.43 cents a litre to heating-stove oil prices and another 3.1 cents per litre on gasoline this coming Thursday, that’s with five days out of a possible seven days reporting. Consumers of heating and stove oils should gear themselves to making this last fill-up of product stretch itself out as long as possible with the hope that the markets focus will drop from heating-stove oil product. Hopefully, we will see a steadying out of prices there and some moderation in gasoline before the summer driving season hits,” said Murphy.

Why another increase?
“Heavy investment in commodities with the U.S dollars continued weakness along with varying international concerns continues to play heavy in the markets. The possibilities of another U.S interest rate cut along with recession fears, has led to a heavy investment in commodities like heating, gasoline and crude oils.

“OPEC continues to rattle their sabers over the possibility of production cuts even though the price of oil reached $100.34 U.S a barrel. President of Venezuela, Hugo Chavez says that $100 U.S per barrel is a ‘fair’ price and should be sustained while other OPEC countries fear that oil could drop in price should a recession become a reality. OPEC will meet March 5th to discuss the possibility of a production cut to avoid any drop in oil pricing.

“The possibility of supply disruptions continues to wreak havoc to oil prices and consumer concerns. Ongoing violence in Nigeria along with Turkey’s invasion of Northern Iraq where the Turkish army is attempting to put to rest the Kurdish problem figure heavy in the equation. Ongoing possibilities of supply disruptions remain in these two areas where some 4.2 million barrels of supply could possibly be disrupted should violence spread to oil-related facilities

Summer pricing
Should there be no moderation in spot pricing and historical difference between year-ago pricing trend continues as is, it could prove to be the most expensive summer driving season on record, barring the entrance of the ‘Hurricane Syndrome’ effect. Historical spots remain very high as compare to last year and, if the markets leave unchecked, will result in new record pricing for gasoline. So far, that trend shows that we could pay upwards of $1.37 a litre for gasoline in the immediate St. John’s-Mt. Pearl area. That means even higher pricing for other areas of the province where, in Labrador for example, consumers could pay upwards of $1.50 per litre for gasoline. While a remote possibility right now the difference between last years numbers and this years, are a little disconcerting.”

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For more information, contact;

George Murphy
Group researcher/Member My blog: www.gasandoil.blogspot.com
Consumer Group for Fair Gas Prices
gasprices@hotmail.com