And more budget thoughts
Conception Bay South, NL, March 30, 2010- Consumers in Newfoundland and Labrador will again see some slight changes to fuel pricing this Thursday when the PUB adjusts prices based on the market’s last week of activity. That’s from George Murphy, researcher for the group.
What to expect with prices
“I expect heating and stove oils to increase by 28/100ths of a cent, diesel to decrease by two tenths and gasoline to decrease by 8/10ths of a cent. All this comes with oil increasing to $82 US a barrel. The last time we saw this amount for a barrel of crude was back on October 12, 2008 when oil dropped to $81.19 US a barrel, just shortly after the July slide. Oil climbed to a record of $147.23 on July 7th of that year. The big difference was that the Canadian dollar was measured at $1.19 against the US greenback. Consumers have saved about four cents a litre simply on the dollar difference.
State of flux
“Again this week, the markets are in a state of flux as they seem to be waiting for something substantial to happen. In spite of the positive economic news coming from the US, it’s like they’re waiting for something to build on before any other investment in the markets occurs. I believe that they’re fearful of a deepening financial crisis coming from Europe, in spite of some success met by Greece this past week in securing finances,” Murphy said.
“A huge build in crude oil inventories is another reason why the markets are taking a ‘wait and see’ approach to crude oil prices. A strong sign of waning demand for raw crude product is playing heavily into the markets. Another substantial build in inventories of raw product this week may be enough to send investors for cover in the interim until extra supplies are used up. That may very well take some time as production and rig counts have increased in recent weeks. The industry seems to be gearing itself up for another fall if the counts go up hand in hand with inventory building. Add to this the fact that refinery capacity also picked up for the last two weeks now and we have something troubling to the investor. All will hinge on an increase in consumer demand.
“While it was a good budget, the province could have instituted a different tax cut that would have covered all individuals. Instead of the cut they gave to middle and upper class residents, they had the chance to offer some taxation relief to consumers and business in the form of tax cuts to all forms of heat and some relief to consumers from transportation taxes. The transportation sector would have welcomed the gas tax relief and it would have aided the export industries here that are fighting the uphill battle of a high Canadian dollar.
The relief from taxation levels on heat would have been all-encompassing and would have depended on your usage. Everyone would have been included in this measure and you would have saved in concert with your consumption. A complete removal of the provincial portion of the HST would also have taken government out of the consumers pocket and put disposable income back into the hands of the people that needed it most.”
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