Err on the side of caution…
Interruption possible to most fuel products

Media release

Conception Bay South, NL, June 11, 2008- Consumers in Newfoundland and Labrador are starting to get used to the idea that pump prices are changing on a weekly basis almost every Wednesday now, and they may be right.

The numbers are close to those required for the use of the interruption formula so, the Consumer Group for Fair Gas Prices is warning of a possible increase at the pumps tonight as they believe that the criteria has been met for the use of the interruption formula to bump up pump prices by a possible five cents a litre.

“Six days out of seven needed are showing a move upwards by 4.4 cents per litre plus taxes and that works out to a plug nickel at the gas pumps but the problem here is that we simply just don’t have that seventh day of data needed to nail this one down,” said George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“Heating and stove oils do not show the need for any price adjustments this week although it would not surprise me that they would go up in spite of my numbers. Here’s still a days piece of data that is missing and the numbers are close there.

Home retrofit program on the way
According to Mr. Tom Marshall on an Open Line show on Monday night, government is working on getting a home retrofit program put in place this year in the face of higher energy costs.

”While this might be seen as a good thing, it’s my belief that such a retrofit program should entail government help for those who want financial help in converting their heating systems from oil-based sources back to electricity. While electricity may be also based on demand, government has the ability through legislation, to prevent any spikes in electricity charges that may be passed on through Newfoundland and Labrador Hydro and that’s the beauty about owning the corporation. It belongs to the taxpayer of the province and we can call the shot on what costs that Hydro can absorb rather than pass down to the consumer.



Traders’ emphasis on distillates could mean more trouble
Heating and stove oil users can now be warned that, according to one news story from the markets this week, that special emphasis is now being placed on the distillate group of fuels as diesel and jet fuels have now become more predominantly used over gasoline worldwide. That means that heavier investment in diesel will be likely and that should be enough to support higher prices for any distillates for the foreseeable future. “There is a steady demand for distillates as both a transportation fuel and a heating source in the northeast of the continent and most of Europe and that means that consumers are more susceptible to higher price swings. This week alone, distillate fuels traded upwards by eight per cent and that’s for July delivery,” said Murphy.

New refinery on the way - but not for Newfoundland and Labrador
If you had your way, would you allow Canadian crude oil to go south of the border to be refined in South Dakota? Apparently, someone has…
Voters in Elk Point, South Dakota have given approval to rezoning for the construction of a refinery for Hyperion Resources that will, according to the Associated Press new story “process thick Canadian crude oil” at a rate of 400,000 barrels per day. Construction of the refinery is set to begin in 2010 and last for four years, bringing with it 1800 permanent jobs and 4800 jobs during construction.

“Why is it that we have to allow our crude to go south of the border for processing? What’s the matter with this country, that we can’t process our products here and ship the excess to customers in the United States if they want the product? Is it that easy to construct a refinery there instead of here? The Canadian government needs to do more for the consumer in this country like support the processing of our own resources in this country rather than help support the US economy. The Newfoundland and Labrador Government also needs to ensure that none of our offshore resources leaves our waters without secondary processing."

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For more information, contact;

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