Numbers off?

Sounds strange, I know, but true.

The numbers for heating oil were off but we already knew that that might happen. As I said often before that the winter heating blend was different and that we could only go by the stove oil number to use as a guide during winter months until I find a source for kerosene. That's because kerosene is used as an anti-freeze agent during the winter months on a 75/25% mixture. That's why the stove oil number was within the margin for error.

As for gasoline? Different story...

I've checked and re-checked, and they still show the same: that increases should have happened that would have taken gas up by five cents a litre.

Thankful?

Yes, but now people may be questioning my accuracy.

I've checked three sources online and all are showing that my numbers are dead on, so, I can't explain the differences. I even went to three different gasoline types and they all showed increases over the past week ranging close to 6.6 cents a litre on gasoline that was supposed to be there. That was for a reformulated blend out of New York harbour, as it is known in the markets.

Conspiracy?

I can't say, but it has been mentioned before that someone may be making calls to someone down the line to hold back on putting the full charge to the consumer in an attempt to discredit. But tonight, the reality is that we got tagged with 2.5 cents at the pumps rather than the five I had, and I really can't go searching for that extra 2.5 cents.

Maybe they made a mistake in their numbers, after all?...

Naaa!...

Maybe they're "banking on it" for later!

Regards,

George

Stove and heating to take a beating…
Numbers show possible increase coming to heating and stove oils

Media release

Conception Bay South, NL, May 28, 2008- Consumers in Newfoundland and Labrador can expect to see a possible increase to heating and stove oils this Thursday as numbers seem to show that the Petroleum Pricing Office may have to use the interrupter formula.

“Six days of a possible seven days data shows a possible upwards movement of 4.4 cents a litre, just 4/10ths over the requirement for the use of the interrupter formula. I don’t believe that, in spite of the drop in oil yesterday, that distillate prices dropped enough to prevent the use of the formula so, it looks like consumers here may be hit,” said George Murphy, of the Consumer Group for Fair Gas Prices.

“Gasoline numbers are showing an added 3.5 cents a litre, not inclusive of taxes, so, according to the rules, that fuel is not susceptible to a price change tonite. However, I will be going to the pumps in case their numbers were a little more volatile than my own in this case. It’s only by a half cent and I really need that last days data to make the more accurate prediction. That day’s data won’t be available to me until after Thursday’s price move- IF it happens. I’d rather err on the side of caution personally. In the event there is no move in pricing on Thursday then consumers will most likely get tagged next Thursday at the regular price change time.

" What should sicken people is the simple fact that, if this price change holds true, it will be happening at a time when the trend traditionally shows downwards in the summer non-demand season for heating and stove oils. People should realy be worried over their heating expenses this coming winter if this keeps up. Heavy investment is beginning to lead to a collapse in the need for heating and stove oil product. Investment is actually going to kill the distillate market by making this product unaffordable to most consumers in North America. Are they pricing Canadian and US consumers out just to send the product overseas to the more lucritive European and Aian markets?

"Are we easterners going to be left freezing in the dark?

“Continued heavy demand by investors in commodities like gasoline and distillates again are playing heavy into the markets this past week and there was some added pressure on gasoline as well with the final run-up to the US Memorial Day holiday. What we keep hearing out there is the fact that all this high price jargon continues to make for an artificially-supported price and there is simply no justification in numbers that we see here that they should be this high. This is a bubble that is soon to break and bring investors to the short end of the stick. At least, here's hoping!”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices My email: gasprices@hotmail.com

How it all worked out...

I guess by the time you all drop in on this note, you will have already heard where the numbers went; mostly up. I guess we dodged a bullet when gas didn't move as I thought it would, but how close was it in the end?

From my media friends at VOCM, I got details of the hit on heating and stove oils and, as it turns out, with seven days now reporting here, I was out by something in the order of 3/100ths of a cent. My final number aloowed for an increase of 7.71 cents. That means that the decrease we all got from the removal of "jet" from the summer mix, was eradicated in one stroke of the pen.

What's worse is that our fishers and transportation sectors got the perverbial kick in the teeth overnight with an allowable 9.2 cents a litre increase to diesel pricing. That's why I say in my releases whenever I talk about the heating/stove oil numbers that "the number may also be pointing the way that diesel will also be going", in this case, UP...

Gas was a little different as the volitility of the markets got to me on this fuel.In the end I had an allowable of 4.1 cents a litre, if you include taxation, or 3.6 without the tax component. The interrupter works on the basis of a four cent a litre movement up or down as measured over seven days.

I usually call my shot with five days reporting so everyone can be a step ahead, particularly when it comes to heating and stove oils and to give the media a chance to report and get the word out to everyone...

My margin for error is 3/10ths of a cent and, with the volitility I figured that I would get the word out on a chance increase in case I might be off just a little; in this case by that extra 1/10th of a cent that would have moved my numbers up to four cents even on gasoline. Guess I "missed it by that much".

Hence, we dodge a bullet for this week with pricing for gasoline still on track for a possible 3.6 cent a litre plus taxes increase coming for next week at the regular setting of prices.

I just hope no one was inconvenienced by my call on this one.

Oh well, it's off to bed and call Randy Simms in the morning!

Sometimes, a tenth of a cent can ruin you...lol

Regards,

George Murphy

New data still shows increases to heating and stove oils

Gasoline to drop...

I have some new data to share with you all in the province...Follows from yesterdays post.

New numbers here are still showing an increase coming to heating oil prices as well as those for stove oils, this time for twelve days show an allowable of 1.86 cents per litre. That could mean a possible high selling price of 98.02 cents per litre for heating-stove oils in this area!

Unbelievable!...

Initial projections at the start of the fall season showed numbers anywhere between 85 and 95 cents with a buck a litre possible...

Gasoline shows downwards at 1.9 cents in spite of the record trading price for crude oil. I think that what this shows is that this commodity has been stretched to its limit when it comes to being a toll worthy of investment rather than the US greenback. I think that what we see is the law of diminishing returns kicking in here-you can raise the price but you will still sell less product to make the same revenues...

As a sidenote?...

Nice to see M.J Ervin revise the summer forecast for gasoline pricing but his numbers are still a little too high. He's forecasting summertime prices of $1.20 a litre in the metro areas-I presume he's talking Toronto- with possible spikes of $1.50 in more rural areas.

I feel like we're all caught in a "bid-ask" scenario at times with the Calgary company part of the "ask" side...lol

My models are still showing anywhere between $1.22 and $1.37 a litre for gas in the immediate St.John's area and with my most recent model showing $1.28 a litre at peak.That means that Toronto and it's environs could see anywhere around what they are experiencing right now, around the $1.08 figure...

Keep in mind that this does not include panic scenarios to the markets like-you heard from me first-"Hurricane Syndrome". Otherwise, that could mean spikes to newfound territory in pricing again.

I'm still taking bets that investors are soon going to realise that they can't drive up the price of commodities anymore than what they fel the consumer is willing to pay and that's why, when you mix recesion into the equation, that we'll soon see a "profit-taking selloff" in crude oil.

Hold off on buying any more heating oils for now, if you can do it. My bets are that this is the last of the increases and we'll soon be witness to a slide in heating-stove oil spot pricing.

Any comments, drop me a note or leave one here...

Regards,

George Murphy

Consumer Group for Fair Gas Prices

gasprices@hotmail.com

Gasoline to rise. Our turn to take the hit...

In Newfoundland and Labrador, consumers will wake up to find that pricing for gasoline did, indeed rise a couple of more pennies, to reach an unprecedented level for this time of the year.

Spot pricing for stove oils however, are showing a downwards trend thankfully...

So far, gasoline shows a 2.7 cents a litre increase while stove oils show 1.24 down. That's with two more business days to go.

I expect that both numbers will be less than what I have here with the next two days measurements included. I expect gasoline to show a more moderate increase than what I have and for stove oils to decrease still further.

Keep your ears to the media to hear the details. I'll have a release out in the morning when numbers for "day 13" come into play.

Now, for what's on my mind after all these increases in other jurisdictions the last couple of days...

When I first heard of the latest rounds of "panic buying" I kept wondering how these companies or businesses manage to stay in business without some sort of consumer revolt. I am absolutely amazed that some of these businesses could charge what they did-when they did without any hard evidence to justify such an increase in pricing to the consumer.

Vancouver did not deserve to see pricing that hit $1.32 a litre at the pumps. Nor did Toronto residents who saw an added 10 cents a litre.

Spot pricing for gasoline product peaked at 7 cents from April 22nd to reach 67.1 cents a litre on April 30th...

Just because we're dealing with a "savvy" oil industry that knows they can "do maintenance" to justify a draw on United States gasoline inventory does not justify the move in pricing that consumers saw. Shutdowns for refinery maintenance is taking longer to achieve the last couple of years and the periods that they claim for taking refineries off-line to do it, are getting longer.

Why?

My belief is that refiners want to draw on inventory to drive up pricing simply to recoup the capital costs for such "maintenance". The more time they take in getting refineries up, the less inventory is made available for the summer driving season. The less inventory gives the trader more time to speculate on future pricing of gasoline and other motive fuels and that means higher pricing to be paid for a product that is so important to the consumer.

We're lucky -this time- that our market here in Newfoundland and Labrador, is regulated. What regulation did at this time-frame the last week was take away the initiative for the companies to drive up pricing here. It also protected the consumer from an "artificially created" and imaginary problem that was created by the New York Mercantile Exchange traders. We were, at least partially protected from the hit consumers had to take on the mainland.

Should there be an investigation into the oil company's practises in North America?

Yup!...

Darn tootin'!...

Regards,

George