After Greek decision…

Markets ask “What’s next?”

Media release

Conception Bay South, NL, November 1, 2011- Consumers in Newfoundland and Labrador won’t see much change at the distillate level after this week’s performance with oil prices, but gasoline will be dropping. That’s from the group researcher with the Consumer Group for Fair Gas Prices, George Murphy.

“My margin for error is three tenths of a cent, and my numbers for distillate are showing that there may be no change in prices with the distillate group of fuels. Heating and stove oils show an added 17/100ths of a cent increase in price while diesel shows an increase of just 1/10^th of a cent. Gasoline is showing a drop of just 1.5 cents a litre for this Thursday”. Murphy said.

“The markets have been thrown in a state of flux again with the European Union bailout plans for Greece. Yesterday, Greek president Papandreou threw water on a bailout plan that took months to put together when he inexplicably told the media that he would put the bailout plan to a referendum to the Greek people. It’s widely believed that the right turn by the Greek president will put Greece closer to a default situation on it’s plans to pay off debt and puts into question the viability of some European banks. Any default will likely throw the European banking system into crisis.”

‘I believe he’s laying out a challenge to his opposition in Greece. He has nothing to lose by putting pressure on his opposition in Greece to be forced to agree with the bailout plans, but he’s walking a fine line with his own people who would have to face most of the austerity measures at the same time. If he wins his mandate through winning the referendum to accept the terms of the bailout, then he will help ensure government stability in Greece while the country works through austerity measures. He’s also laying the fate of the world economy and the European banking system at the feet of the people of Greece. It’s going to be a hard sell to the Adriatic country, but it’s being done democratically in the place where it all started, and the people of Greece will have the ultimate say in whether Papandreou will survive politically.

“In the meantime, Greece also is holding rising prices at bay for now. Any likelihood of rising prices have been mitigated, at least for the time-being, as the situation in Europe takes shape in the coming weeks. While there may have been some slight improvement in the world economy in the past couple of weeks, there’s a new awakening of the gravity of the financial system in Europe that threatens t sink everyone back into recession again. It may be the one positive influence on saving consumers money this winter, the fact that Greece is calling the shot this time around. Certainly, this takes away any impetus on price increases in the short term.”

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP