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Wednesday, April 21, 2010

Not much change in prices expected this week
Will an Icelandic volcano engineer a price collapse?
Media release
Conception Bay South, NL, April 20, 2010- Consumers in Newfoundland and Labrador will not see any big changes in fuel prices this week when the PUB adjusts prices this Thursday. That’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“All the numbers are down, but by tenths of a cent in all cases. I expect a drop of two tenths to heating and stove oils, down by four tenths to gasoline and a drop of a half cent to diesel prices,” Murphy said.

Distillate prices to collapse
Consumers could see the beneficial effect of a volcano in the markets, but the oil company Vitol, according to a Bloomberg news story, is trying to prevent a break to consumers at the same time. The longer the volcano spews ash and cancels flights, the more likely a collapse in prices. However, while jet fuel inventories have increased because of cancelled flights in the volcano cloud regions of Europe, Vitol is attempting to store its jet fuel in a tanker until jet fuel demand increases, and when the cloud of volcanic dust dissipates.
“The last time we saw a drop in demand of jet fuel was immediately after the attacks of 9-11 and that saw a drop in consumer demand for jet fuel and other distillates that brought down prices to consumers. Back then, refined product was still flowing freely in the markets. This time, things are different with Vitol artificially removing jet fuel from the markets just to manipulate the price and prevent its collapse. Jet fuel is also an important winter fuel for the winter heating blend in Newfoundland and Labrador, as well as other cold climates. What we have here is a company willingly manipulating the market conditions to help support the price simply by leaving this product in storage.
The newswires are alive with the sound of the airlines complaining about being in a ‘no fly’ situation, but how much of that hue and cry is also being influenced by Big Oil? Is Big Oil influencing government ‘no fly’ restrictions in order to prevent the collapse of prices? In return, are passengers being put in danger by the airlines and Big Oil’s pressure to return to the skies?”

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For more information, contact;

George Murphy
Group researcher/Member

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