World financial crisis plays a role

Consumers to catch a break on Thursday

Media release

Conception Bay South, NL, August 9, 2011- High energy prices may have resulted in a slowdown in the world economy and sparked the financial crisis, but the world economy may have a chance to recover, if prices keep dropping like they will this Thursday. That’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

Reasons why prices will drop

“The havoc and doubt about the world economy and how well the economy has actually been doing started the drop In oil prices that will result in a break to consumers this week”, Murphy said. “High energy costs chew up a lot of disposable income amongst consumers out there, so it’s not unreasonable to assume consumer spending would have been cut with the advent of austerity programming to pay off some country’s debts. Hose methods to pay off debts are part reason why prices have been dropping.”

“While oil prices dropped feverishly, refined commodities didn’t go down as far as one would expect. There’s still a thought out there amongst speculators out there that refined commodities are a place to cut your losses. I believe that prices for refined commodities are still going to show a downwards trend for the next while, if market conditions continue with doubts about economic recovery.

What’s In the numbers

“Heating and stove oils show a drop of 2.98 cents per litre coming for Thursday, while diesel is down by 3.7 cents. Gasoline numbers are taking the biggest drop, now showing down by 6.1 cents a litre to consumers when the Public Utilities Board makes the adjustments early Thursday morning.

“Consumers need this break, and it is welcome, but the investor and speculator needs to know that we still can’t handle prices as high as they will be, and we’re still looking for prices to return to a level we can bear. There really has to come a point where they have to realize that high energy costs cause world financial problems and economic hardship in the first place. Cheap energy means everyone benefits.

Competition in the St. John’s northeast?

Some gas stations in the northeast end of the capital have lowered their prices slightly in response to the entry of Costco in the markets. While prices have been set at a maximum of $1.33.4 by the PUB, some stations are down to $1.31.4 against the Costco selling price of $1.27.4 cents a litre.

“The entry of Costco into the market has done expressly what I had hoped for. Consumers now have a small break coming to them as there is now a spread of some six cents a litre between stations. Finally, we have some competition out there, and we hope it continues!”

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

On Twitter: @GeorgeMurphyNDP