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Tuesday, March 15, 2011

Numbers are down
but for the wrong reasons

Media release

Conception Bay South, NL, March 15, 2011- Consumers in Newfoundland and Labrador will experience something that they haven't seen in weeks when the PUB adjusts prices this Thursday. Lower prices. That word is from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

"The numbers are all starting downward, and we're going to see a slight break at the pumps, but for all the wrong reasons, " said Murphy. "The situation immediately after the earthquake in Japan has the world monetary markets fearful over any economic recovery, especially after the impact the quake has had on Japan.

"I expect the real breaks to come next week, if this trend keeps up. Refined commodity prices began to be impacted by the Japan events today, and they signal a slight break to come for this Thursday. My numbers show heating and stove oils to drop by 72/100ths of a cent, diesel to drop by 7/10ths of a cent, and gasoline to drop by 1.4 cents a litre.

"Other areas of the country will see immediate effects of lower cash petroleum numbers. US consumers will see a drop of close on 16.2 US cents a gallon when they wake up tomorrow morning, welcome news for them as some areas have broken the four dollar a gallon mark.

"Here in Newfoundland and Labrador, if these numbers hold up, we could be looking at another drop of close on four to five cents a litre off gasoline, provided the situation in the markets remains as fluid as it is right now,. But anything could happen as regards to world events to change things again to send prices up. We still have the situation with unrest in the Middle East and North Africa as well as the European Union financial situation with some of its members that has yet to play out fully. While this small break was predicted a week ago, the drop in price was not supposed to be because a lot of people died in an earthquake-tsunami scenario.

"The situation in Japan has suddenly put pricing uncertainty back into markets that were already uneasy over the Middle East and North Africa. Over one million barrels a day refinery capacity has also been shut in where consumers there use almost 4.2 million barrels a day and already there are long lines for people looking for supplies. The economics of Japan's 'non-use' of crude oil at this point has put extra oil on the markets all of a sudden with faltering demand as well.
"Either way, numbers will be down, but I think we're all praying for Japan to recover from this one instead."

-30-

For more information, contact;

George Murphy
Group researcher
Consumer Group for Fair Gas Prices

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