On the rise again

Distillates expected to increase

Media release

Conception Bay South, NL, March 22, 2011- If the numbers are right, consumers will be paying more for distillate type fuels this coming Thursday when the Public Utilities Board adjusts prices. That's according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

What the numbers say

"The numbers show distillate fuels will see another round of increases, while gasoline shows just a very slight drop, if anything at all." Murphy said. "I expect heating and stove oils to increase by another 77/100ths of a cent and diesel to increase by 1.3 cents a litre."

"Gasoline shows just a drop of three tenths of a cent, so if you account for my margin for error of just that same three tenths, there may be no change in gasoline prices this week, according to my numbers."

Oil faces a huge test

"Oil prices bounced back this past week, along with refined commodity prices as positive economic news and spreading unrest in North Africa and the Middle East continues to carry weight on traders in the marketplace. Oil prices also increased with optimism of a recovery of the Japanese economy after the earthquake and tsunami in the northeast of the country."

"Continuing concern on the part of consumers also will play into oil prices over the next little while as anger builds with oil's connection to higher consumer prices for other goods and services. People are genuinely angry over the fact that food prices have increased, particularly in the US, part and parcel with rising refined commodity prices. It's my belief that consumers will soon let their feelings known by curtailing spending because of a lack of disposable income, that's if they haven't already done so. Reports from the US already show a sudden drop in existing home sales that may be related to the possible downturn in consumer spending in the US."

"Consumers are watching their money disappear down the fill-pipe."

"Because of this, oil will have trouble seeing a continued climb in price in the long term. People are starting to make the choice between going out to a movie or staying home. Oil prices are simply not sustainable and the economy is being put on notice with signs of a slowdown in spending. I'd say that oil is simply just not sustainable at this level without having repercussions to the economy or to consumers. My guess is that the consumer is going to say 'no' shortly."

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices