Numbers confirm interruption to fuel prices is likely

Media release

Conception Bay South, NL, October 27, 2009- After nearly two weeks of rising oil prices, consumers in Newfoundland and Labrador are set to pay more for fuel products this coming Thursday morning when the Public Utilities Board moves to use the interruption formula to re-adjust prices.

“I’ve been tracking elevated spot prices for the last several days, said George Murphy, group researcher for the Consumer Group for Fair Gas Prices. “According to the rules of interruption, you need seven days of data where the spot price exceeds that of the previous price setting by at least four cents a litre. The data indicates movement upwards for all fuels I monitor. Here’s what I have:

• Heating and stove oils will increase by 4.41 cents per litre.
• Diesel fuels will increase by close on 5.1 cents per litre, and…
• Gasoline will increase by 7.0 cents per litre.

“It’s disturbing to see an increase in fuel prices now, particularly when the economy is trying so hard to recover from the recent downturn. These increases as of late, take a lot of momentum out of the economy and removes disposable income from the consumer, particularly as we are also getting close to winter and the important Christmas season. All this is coming in on the tail of a fuel surcharge increase from Marine Atlantic and it does nothing but increase the inflation rate to the Newfoundland and Labrador consumer.

Draw-downs in gasoline inventory, a much defined drop in refiner capacity and a pick-up in economic recovery are reasons for the recent hikes in prices.

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For more information, contact:

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices