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Tuesday, August 21, 2012

Distillate fuels take another hit
Oil up $3 US on the week

Media release

Conception Bay South, NL, August 21, 2012- Consumers in Newfoundland and Labrador will notice another slight increase to gasoline prices this week when the Public Utilities Board makes their weekly adjustment to fuel prices, but the real story is the increase to distillate prices, like heating and diesel fuels. That news from George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

The numbers
"Heating and stove oil numbers are showing another increase this week of 1.66 cents a litre. That would bring all current heating and stove oil prices over the $1.00 a litre mark again, well ahead of the winter heating season. Diesel fuel prices are expected to increase another 2.0 cents a litre bringing diesel prices to $1.35.5 a litre on the Avalon and $1.70 to coastal Labrador. Gasoline prices are expected to increase by just 8/10ths of a cent a litre", Murphy said.

Consumers will be hurt
"From all appearances, it looks like there's less of a focus on gasoline prices for the second week now as we are quickly coming to the end of the summer driving season. The focus of investors has turned to distillate fuels with an important quarter for companies shipping via the use of diesel fuels and with the winter heating season the next "big thing" to invest in. Sad to say, but prices for heating and stove oils simply didn't see the retreat in prices that is normally seen during the summer months, and consumers are going to hurt again this winter, unless there's another downturn in the markets. We need to see that market correction happen soon, if it is going to happen at all."

Opportunity for methanol?
"While fuel prices south of the border increasing as a result of a possible shortage of corn-based ethanol production, there is an opportunity for government here to make strategic investments in other sources of oxygenates, like ethanol, that will do the same job. Methanol, for example, is a oxygenate that is derived from any wood fibre source, and any investment and research there could take pressures off food prices as a result. It would allow the recycling of any wood fibre material into methanol and also take the pressure off food prices, like corn, for which ethanol is derived. We could see another important source of oxygenates from any wood fibre that would allow for sourcing to the petrochemical industries, like refining. I've suggested this before, but it's only now, when we see gasoline and food prices increasing as a result of the possible shortage of corn products because of drought in the US, that it becomes important to look for other sources. The possibilities and implications to the recycling industry as a result, are undeniable, and there should be no good reason for consumers to take a hit on food prices because the petrochemical industry considers corn as a fuel rather than food!"


For more information, contact;

George Murphy
Group researcher/member
Consumer Group for Fair Gas Prices
Twitter: @GeorgeMurphyNDP

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