Oil keeps rising, so does the price of gas
Consumers to get dinged at the pumps again

Media release

Conception Bay South, NL, May 7, 2008- Consumers in Newfoundland and Labrador will notice a jump at the pumps again tonight, that’s according to George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

“Consumers in Newfoundland and Labrador can expect to see another increase at the pumps tonight as numbers are showing an allowable two cents a litre over twelve days of data recorded. While stove oils show a very slight decline, the number is too low to note any real change in pricing and that may be an indicator that there will be a slight adjustment in heating and diesel oil pricing,” said Murphy.

Reasons why prices will go up
“Continued supply disruptions in Nigeria and the promise of Kurdish attacks against Northern Iraq oil infrastructure as revenge against the United States for sharing satellite intelligence with Turkey, drops in production in Russia and Mexico and heavy investment in related fuel commodities continues to dictate what consumers will pay at the pumps. A run-up in oil driven mainly by speculators continues to put upward pressure on oil pricing as a result of investors hedging against the drop in the U.S dollar.

New investment laws needed
“There’s a fine line between investment in the actualities of the oil markets and the reality of the markets that has been costing people so much. Using important consumer products that have faced no appreciable increase in demand has become the norm in the markets as of late. The simple laws of supply and demand have been thrown to the wind. Food costs have gone up merely on speculation that they will be of more interest to companies for the manufacture of bio-fuels rather than for the basics of human consumption and this has already caused problems in other countries. The high cost of diesel has resulted in other added costs to foodstuffs. It is only a matter of time before we see more food costs passed to the consumer. What investors are doing instead of speculating on the actualities of the markets is, in fact, speculating on starvation. They’re betting that food as a fuel is more important than food for consumption.


Time for a new National Energy Program to protect Canadians?
“The Government of Canada should certainly be looking at the possibility of protecting the Canadian consumer from outside sources of pricing influence knowing that we are self-reliant in our resources of oil. We should, as a country, institute a new National Energy Policy that protects Canadian consumers and industries like the fishery from outside influences like OPEC. If they can sell gasoline in downtown Tehran for 11 cents a US gallon, then we can sell our own refined product to Canadians for a Canadian price.

Heating oil users will face problems next winter
“I have not noted any appreciable drop in heating oil prices and that remains a worry as consumers usually start to see a retreat in distillate pricing during the spring. That trend has yet to happen and the promise is there to see higher than normal pricing again next winter. Prices need to see a retreat of almost 50 cents a litre in the coming months to return to some form of ‘normalcy’ in their heating expenses. A lot of people have to jump in here in order to avoid any problems for consumers and to put heating/stove oil pricing back to where they were in 2005.

Food banks will need help
“Heating oil users face a dilemma this coming winter if pricing does not return to more affordable levels. They will again be faced with the challenge of choosing between food and fuel this winter. Food banks can expect to see another increase in traffic if heating oil pricing fails to drop. Numbers here indicate the fact that consumers will face that tough choice as all models show heating/stove oil pricing will be up again this coming winter. Although it is very early to predict the price range, it looks as though consumers can expect to pay close to that $1.00 a litre again if numbers for heating/stove oils fail to retreat.”

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For more information, contact;

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