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Tuesday, May 25, 2010

Numbers down again
Continued European debt insecurity plays its hand again

Media release

Conception Bay South, NL, May 25, 2010- Consumers in Newfoundland and Labrador may not be responsible for any debt problems in Europe but they certainly will be beneficiaries of the side-effects of it when the PUB adjusts prices this coming Thursday. That’s according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“Again this week, consumers in the province will benefit by the fall in oil prices brought on by the ongoing fiscal crises in some of the European Union nations. Consumers will see a drop of 2.82 cents a litre to heating and stove oil prices, a drop of 3.2 cents a litre to diesel fuels and a drop of 3.5 cents a litre on gasoline pricing. It’s great news for consumers and the tourism industry if prices continue downwards, but not so for the province’s treasury which must be taking a pounding, not only from the drop in oil royalties but also from a drop in taxation collected from motor and heating fuels,” Murphy said.

“Things aren’t getting any better for investors in oil either. Anyone hoping to see oil increase in price will be disappointed to know that recovery in oil prices probably won’t happen, barring any other outside influence, like OPEC instituting further production cuts, for example. Oil will only start to increase again once the problem Euro countries prove they can sustain economic growth alongside the paying down of their debt along with carrying out their own austerity programming. That may prove to be harder than one may think, and it’s showing the world right now why investors are flocking to the US dollar over commodities like oil and its refined products. Even now, the long-term outlook for oil shows it trading on the July futures markets at around $68 US per barrel. That spells trouble for any country profiting from high oil prices but should help bring on some actual North American economic recovery as disposable income goes back into consumers hands again.”

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For more information, contact;

George Murphy
Group researcher/Member

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