Update #3:

An early Christmas present on the way
Consumers to see substantial drops in all petroleum products

Media release

Conception Bay South, NL, December 9, 2008- The numbers confirm it. Interruption to all fuel pricing will occur Wednesday night on heating and stove oils, gasoline and diesel fuels, and the drops there will be substantial, that’s if the numbers that the consumer Group for Fair Gas Prices have been tracking are any indication.

What consumers should expect
“According to the numbers, heating and stove oils will see a drop of 8.25 cents per litre while, gasoline will drop by close to 8.3 cents a litre. The real gift to the Newfoundland and Labrador economy may very well be for diesel as that fuel is projected to drop by a whopping 10.5 cents per litre after taxes are accounted for”, said George Murphy, group researcher for the consumer group.

“We can say fairly that, with the drop in diesel pricing, areas of the Newfoundland and Labrador economy should start to see the removal of some of the fuel surcharges that they were forced to pay for the movement of goods and services that affect the consumers in the province. Diesel prices have now dropped by almost 35 per cent against the peak prices paid in early July. Our fishing industry should be able to catch gains from cheaper transportation costs as well as the difference in the Canadian dollar against the US greenback as well.

“OPEC last week, failed to come to any agreement on any substantial cuts to production as overall demand for oil has dropped along with the ill performance of the world economy. There still lies a chance that OPEC will make some sort of drastic cut when they meet again on December 17th. Some gains in inventories have been realized in recent weeks except for last week, which showed the first draw-downs on available refined products in North America in some time. It is my belief that there is enough available inventory of heating and stove oil inventories to make it through the rest of the winter so, I don’t expect to see any substantial increase in heating and stove oil prices unless OPEC steps in to address world over-supply or demand for distillate fuels show a great increase. Any further drop in refiner capacity which was measured at just over 84 per cent, may also affect distillate supply. A drop in production wouldn’t be surprising if Big Oil knew it would help support the price of the refined product either.

Fuel surcharges
“As the busy Christmas travel season is about to start, consumers should be asking serious questions about the last remaining fuel surcharges on things like air travel and Marine Atlantic ferry rates. It should not be acceptable for Marine Atlantic to let fuel surcharges wait until January to be lifted when they place their orders for fuel at that time. They can easily place an order for fuel now and have the difference in fuel prices reflected back to the amount of inventory then on hand and adjust the surcharges accordingly. Why wait until January to bring relief to the consumer and industry who use the service?

NL Power should adjust pricing
“When will we hear from Newfoundland Power or the Public Utilities Board on any adjustments to electricity with the drop in crude oil prices? It’s about time we hear from them to find out what the consumer can expect to happen to electricity rates in the coming weeks. Businesses will be forced to pay an additional 50 cents an hour to wages and, I’m sure that they can use the savings from electricity rates to help defer the costs of higher minimum wages in these tough economic times. Consumers will also expect to see lower electricity rates to hand in hand with the heating relief program just introduced by the government.

Some crude facts
1) The last time spot prices were this low for heating and stove oils was recorded on September 19th, 2006 when spots hit a then record 48.95 cents a litre.
2) The last time spot prices for gasoline hit this low was on June 14, 2002 when the spot price was recorded at 30.22 cents per litre.
3) The last time crude oil traded close to yesterday’s close of $42.07 US was on July 28th, 2004 when it closed at $42.80 a barrel.

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For more information, contact;

George Murphy
Group researcher/ Member
Consumer Group for Fair Gas prices

Still on track for a big drop in pricing

Update #2

Hi to all...

Six days data out of seven days needed for interruption to occur are now showing the following after todays trading:

1) Heating/stove oils to drop by 8.02 cents a litre.
2)Gasoline down by 8.1 cents a litre, and
3) Diesel down by 9.0 cents a litre.

While oil traded up almost $3.00 a barrel US, the Canadian dollar showed strength and picked up almost four cents against the US greenback. Even though spot prices picked up in value with extensive trading on the markets, the difference in the dollar against Friday's finish was enough to absorb any shock to refined commodity prices and the numbers failed to move when converted over to Canadian values.

I expect the prediction to hold after tomorrow's trading and for the interruption to pricing to happen this Thursday as predicted.

I'll be in touch with an official press release tomorrow night with all seven days of data and the final numbers then.

regards,

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Interruption to pricing now likely

UPDATE: Looks like all fuels regulated under the guides of the Petroleum Pricing Office will face interruption this week coming. Here's a breakdown of what's likely to occur this Thursday.

You might want to spread the word on this one as the numbers are substantial here:

• Heating/stove oils show 8.0 cents a litre down so far.
• Gasoline shows 8.1 cents a litre down.
• Diesel shows almost 9.0 cents a litre down.

With two more days of information to come, I don't expect the numbers to change too greatly but, be warned that anything could happen out there in the markets and the data could change. They may even be greater than what I have here now.

Regards,

George

Complete collapse of oil prices coming?

Boon to consumers in Newfoundland and Labrador though...

If Merryl Lynch and Platt's are right, then the provincial treasury of Newfoundland and Labrador may not score the large surplus for this year that was expected for this fiscal year.

That's not the best of it...

According to figures from the EIA out of the US, we may have already reached the point where the provincial treasury may be grossly affected by the drop in crude prices. While there may still be a slight chance of balancing the expectations for this year, if the markets hold true, that we will be in recession for close on two years, then the royalties paid back to the province will almost be a pin-drop compared to this year. Twenty two gravity oil is trading at $37.76 a barrel while I have the break even at $36.63 for the budget to be affected. 34 Gravity oil unlike that of Hibernia, is now trading at close to $45 bucks a barrel. The finance department must be on the edge...

Wait for next year...

If the stories are true, it would underscore the estimate I had in July of possible $60 per barrel oil that I expected would happen if a recession hit, a recession that would be caused by excessive and artificially inflated energy pricing. What a kick in the teeth!

We're almost there...

Merryl Lynch is now reporting possible oil pricing of $25.00 US a barrel for West Texas Intermediate type crudes which, if the pattern follows, makes Brent type crudes, of which Newfoundland and Labrador crudes are priced, around $4 bucks less than that. A pittance in royalties could be on the way for the Newfoundland and Labrador treasury but, it could prove a boon to the consumer of gasoline and heating oils.

How low can consumer pricing go in Newfoundland and Labrador if that scenario were to happen?

How does 74 cents a litre grab you for gasoline and 41.5 cents a litre for heating/stove oils sound? (Depending on the retailer you buy off, mind you)...

One can only wish that prices go so low that we don't have to see the malls blocked with people trying to keep warm this year and one can only wish that we'd have no need for a heating rebate program as well.

Those last two realities may be closer than we think, that's if OPEC stays out of the mess in the markets, like the Russians are...

Keep the fingers crossed!

NOTE: In the meantime, I am also tracking some nice drops in all three groups of fuels I Measure. There is a possibility here that we could see interruption for gasoline, heating/stove oils and diesels for next week, so keep an eye out here Tuesday evening for any word on that.

Regards,

George

Prices keep dropping
Gasoline and heating oil prices to see further retreat

Media release

Conception Bay South, NL, December 2, 2008- Consumers in Newfoundland and Labrador will see prices for most petroleum products drop again this Thursday. Oil prices and its related refined commodity prices, continue their slide in the face of worsening economic news and the failure of OPEC to address a market oversupply.

“Prices for gasoline are expected to see another 3.2 cents a litre down this Thursday while heating and stove oils are expected to drop a further 4.2 cents a litre. That number may be slightly off the mark for winter heating oils as they are now subject to a winter heating blend of #2 and jet fuel but, it should be a good indicator of the direction pricing will be taking. Diesel fuels are expected to drop another 1.2 cents a litre”, said George Murphy of the Consumer Group for Fair Gas Prices.

“OPEC has so far, failed to address any over-supply of oil in the market as they did in the run-up to production cuts in the late 90’s. Their failure to cut back on production led to oil prices that hit near $11.00 US a barrel. It was only when oil hit rock bottom that OPEC instituted a round of cuts that saw oil prices rebound. If this is another scenario like this being played out, then there may be no end to the drop in oil prices and there could be some grave consequences to some aspects of the offshore oil industry. It may be good for the consumer however, and that is a positive thing that will also help motivate economic recovery. OPEC will have a regular meeting on December 17th that will, I believe, contain the news of further cuts to production to help stem the fall of oil prices but, it may be ‘too little, too late”.

“Inventory data out of the United States still shows good building of inventories of gasoline as consumer demand remains crimped by bad economic news. This is another week of gasoline inventory gain and only very slight inventory draws of distillate that still is supplying some means of support to heating oil and diesel prices. If inventory starts to build there, we could see further slippage in distillate pricing before the onset of winter.

“Interesting facts are apparent here at today’s price. Spot prices for gasoline are now almost 9 cents a litre cheaper than what they were on May 19th, 2005 while, heating oil prices were almost six cents a litre cheaper than today. Oil on that date was priced at $46.93 against yesterday’s close of $46.96 a US barrel. The retail gasoline price on that date was 99.9 a litre in the immediate St. John’s area. The last time we saw prices below 90 cents a litre at the pumps was the week of January 15th, 2005.”

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For more information, contact;

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

Damned if you do...

Numbers showing down, but ...

In this case, it's just the opposite.

We were on track for a possible bout of 'interruption in pricing' particularly to gasoline pricing until yesterday's market trading and the fall in the U.S dollar agin steps in.

A sudden interest in the stock markets and interest in commodities as the US dollar started falling again, led to yesterday's increase in oil pricing and its related, refined commodities so, from the looks of things, there won't be interruption afterall. Seems that traders will try to take advantage of any situation in the news to try to recoup their losses. In this case, it's a combination of another massive US bailout of the banks and Barack Obama's appointment of his economic team as well that has met with some approval.

Some numbers are still showing "down" however, so, that's the good part. Gasoline and heating oils are still showing that trend for next week.

Either way you look at it, the guys and girls in the provinces' finance department must have breathed a collective sigh when prices increased today...

Consumers to see more breaks for petroleum products
Prices continue to slide, but…

Media release

Conception Bay South, NL, November 18, 2008 - Consumers in Newfoundland and Labrador will be seeing more breaks on pricing of petroleum products this week when pricing is set this Thursday but there should be more savings than what we are seeing at the pumps, that’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“Consumers should see another 4.0 to 4.2 cents per litre down on gasoline for the immediate St. John’s area. That will translate to a price of .89 cents a litre for the residents of Conception Bay South. Heating and stove oils are projected to drop by as much as 4.58 cents per litre and diesel fuels will drop close to 4.0 cents per litre this Thursday at midnight when pricing is adjusted by the provinces’ Public Utilities Board Petroleum Pricing Office.

Fuel surcharges should be dropping
“Mariner Atlantic instituted a round of fuel surcharges on passenger and auto traffic last June 12, 2008 on top of a 2 per cent fuel surcharge that was added in June of 2007. The numbers for residual oils are now 32 per cent of what they were back in March, 2008 when they hit their peak. It was in June of 2008 that we saw the additional 27.7 per cent fuel surcharge added based on those numbers. Residual oils reached a peak of $2.73 a US gallon but have since backed down to a rough 88 cents a US gallon. Why are we still paying the surcharge? This is adding to the hardship consumers and business is having in a hard economic time. It is time for Marine Atlantic to return pricing back to the June ’07 level as numbers have decreased to that point.

“As for the airlines, we have seen the price of jet fuel return to August ‘05 levels yet, we haven’t seen a substantial drop in the fuel surcharge on airline ticket fares. When are the airlines going to remove the surcharges they implemented and return ticket pricing back to ’05 levels? This is amounting to a huge financial rip-off to the consumer and business person who requires airline transportation. The airlines along with Marine Atlantic should immediately drop some of the fuel surcharges before the busy Christmas travel season. All these fuel surcharges at this minute add to an artificial inflation rate on consumers in the province and, indeed, to the rest of Canada.

OPEC’s next move
“OPEC is set to meet again at the end of November and I expect another attempt at reducing output by the group. The next regular meeting of the group is set for December 17, 2008 so, this meeting is bringing in the usual concerns of an oversupply in the markets. Consumers should not be surprised to see the group attempt to regain control of world oil supply and, I also predict another cut of close to 750,000 barrels of production.”

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For more information, contact;

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

More drops in pricing on the way

Just to keep you up to date.

With two more days of data to attain, numbers are so far showing more drops to gasoline pricing as well as heating/stove oils and diesel fuels.

Numbers are showing a drop of almost four cents on stove and close to three cents on diesel. The stove oil numbers could be a good indicator of where heating oils will go. Once again, the heating oil mix includes a combination of 75% Jet and 25% number 2 just for the winter heating season and I have not been able to track down an accurate jet fuel number so, this number is more to be used as a rough guide as to the direction heating fuel will be going.

Gasoline is showing almost 3.5 down...

We'll let you all know again about what will come about around 9:30pm this Tuesday night when I'll have all the numbers in....

I'll be in touch...

Regards,

George

UPDATE:

As of Monday evening, I'm now showing definite drops across the board for all fuels.Gasoline shows 3.7 a litre down,heating/stove oils are 4.32 down and diesel down by 3.1 a litre.

I'll give the final numbers Tuesday night, around 9:30p.m......

Consumers to get another break at the pumps
Numbers show interruption to gasoline

Media release

Conception Bay South, NL, November 11, 2008- Consumers in Newfoundland and Labrador should see another break at the pumps this coming Thursday that should bring prices under a buck a litre in most areas of the province, that’s according to George Murphy of the Consumer Group for Fair Gas prices.

“Oil has continued to trade down and that has also been reflected in lower commodity prices, especially for gasoline in the face of weakening demand for the product. Continuing bad economic news and good inventory builds has played into the numbers and that means that gasoline consumers should see a drop of approximately 4.7 cents a litre at the pumps this Thursday morning, if the numbers are right.

“Stove oils and diesels continue to show drops of almost 3.0 and 3.6 cents a litre respectively but it is harder to predict the heating oil numbers with the advent of the winter heating oil mix. A drop is possible there though, in the light of the drops in the market. Consumers should take a ‘wait and see’ approach and gear their purchases after this Thursday accordingly.

“It’s been well over two years since the last time consumers have seen 97 cents a litre in the immediate St. John’s area and it should come as welcome news, should it come to be realized. Just because we are going to see prices drop below a buck a litre doesn’t mean that consumers are good to buy as much as possible however. Consumers should still conserve as much as possible as any consumption can have the opposite effect and help to support pricing rather than see a continuing slide in prices.

OPEC cuts not deep enough?
“Look for OPEC to cut further into their self-imposed production cuts this coming December as oil prices have continued to slide. I expect OPEC to step in and further deepen their cuts by at least 750,000 barrels at their next meeting. That would probably be enough to support pricing at its current level amidst the latest round of bad economic news this past week. OPEC will attempt to put restraint on output and try to influence world pricing.

Government should extend wood pellet rebate program
‘While government has introduced a wood pellet stove rebate program, government should extend the program to include new and advanced technology woodstoves that have become more fuel efficient over the last ten years. Most wood stoves have been improved in recent years that burn wood fuel longer than previously. We also have a small wood supply industry here that is sustainable and we need to provide the incentive to consumers to improve their energy efficiency by providing funding for energy efficient wood stoves. Just because it may be a new industry doesn’t mean that it should be given “carte blanche’ to the wood fuel market. Competition helps to keep pricing down to the consumer and we need to see some of the older technology wood stoves removed to conserve on wood resources as well.

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For more information, contact;

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

Consumers to get a break at the pumps...again!

Hi to all...

Just a quickie as I'm probably going to be doing a cross-island jaunt west again as there has been a death in my family. I have not put together an official news release on this as time just simply won't forgive me.

Not all the data is in but, here's a synopsis of what to expect. I don't think there'll be much change in them between now and Wednesday night.

Numbers
Numbers show 2.39 down on heating and stove oils (13 days out of 14 available), 6.1 down on gasoline (6 out of seven days available) and 4.2 down on diesel (13 days out of 14 available) for this Thursday morning.

Looks like CBS gets the honours of being first under a buck, eh?...lol

Reasons why prices are dropping
1) A drop in world demand and poor world economic performance has resulted in a steep decline in the numbers in recent days and that will result in consumers receiving the benefits of that drop.

2) There has been some moderate recovery in the Canadian dollar and that has played into the numbers. Over the last week, the Canadian dollar has recovered almost nine cents against the US greenback.

3) I believe that the markets have recognised OPEC cuts of last week. While oil has bounced around $65 a barrel over the last two weeks now, their related, refined commodity has shown drops as a result of reduced world demand. Look for OPEC to make another cut of 500,000 barrels at it's next meeting of December 17th as it "pays attention" to the poor economic news and moves to support it's own revenue stream.

4) This might be the last drop in heating and stove oils and we have now reached the point they were for the same timeframe last year when we saw pricing start to rise. We're entering the higher winter demand period and that also means more upwards pricing pressure. I think I would top the tank off now to be sure. In the meantime, another sell-off in the markets might start to make pricing fall again so, take that piece of advice with a grain of salt too...lol

5) My gasoline average shows that there will be possible interruption in prices if market conditions allow for spot gasoline to maintain or further drop in value. If that doesn't happen, as interruptuion requires a four cent average move +/- from the last setting, then consumers can expect to see another drop in prices in two weeks time. My average right now is 48.66 a litre over last weeks range of numbers but yesterday, gasoline traded at 44.23 a litre, a 4.43 a litre difference.
I'll keep an eye and let you all know ahead of time.

Hope this short entry helps?...


Regards,

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Could it be? Gas under a buck a litre?

Stay tuned next week for news on this one. As incredible as it sounds, numbers are already showing a drop in gasoline that could bring gasoline under a buck a litre for CBS residents. Numbers are down by four cents already after today's trading.

Numbers are also showing diesel and heating/stove oils to drop next week as well as oil continues to bobble around the $65 a barrel mark and the Canadian dollar continues to gain some lost momentum from the past two weeks losses.

Stay tuned...More on Tuesday night.

George

Numbers show no interruption this week...

Hmmm...

After such a round of price drops, I was getting a little too used to informing everyone that pricing would be coming down again and, I just knew it all had to come to an end sometime. It's not overwith yet but, it is going to take a little loger to see the price come down this time.

While numbers do not show an allowable for the interrupter formula to kick in, they are still down slightly enough that we might see a drop in pricing coming for next Thursday now at best.

With the latest round of OPEC cuts (yes, they did a 1.5 million cut as predicted here) I expected market reaction to be delayed on the news and to see that cut play itself out in the markets after the first couple of days. Seems we've stalled at falling oil pricing and traders are getting a little "reluctant" in getting oil below $60 US a barrel. No doubt the province here, at least the finance department, will be drawing a sigh of collective relief on the sudden "stall in the fall" of oil pricing as well.

Anyways, numbers here so far are showing at least 3.3 down on gasoline, 1.55 down on heating and stove oils and 2.6 down on diesel. I guess we'll hold out some hope that we'll see the slide in oil continue but, from the look of things we just might have seen the price of oil and their related refined commodities stall for now. The proof of that probably lies in the fact that the drops in price are small right now.

**Just to note: The Canadian dollar has now lost a good 24 cents against it's US counterpart since September 28th and that has cost Canadian taxpayers a rough 23.5 cents a litre, give or take a few tenths of a cent. That's what we get for being tied into being a "petro-dollar" and not having a diversified economy like we should have...

Oh my...

Regards,

George

Might be the end of the line for now
Consumers in NL will see another drop in pricing this Thursday

Media release

Conception Bay South, NL, October 21, 2008- Consumers in Newfoundland and Labrador should see another drop in pricing on most fuel products this coming Thursday, that’s according to George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

“Numbers are showing at least 3.4 cents a litre down on heating and stove oils, 3.7 cents a litre down on gasoline and 4.7 cents a litre down on diesel fuel. The drop we are seeing has been mitigated somewhat by a falling Canadian dollar. Had the dollar been rated at the same rate we were looking at on September 29th, we’d be looking at pricing that would have been eleven cents less than what we’ll see on Thursday. An unsupported dollar is costing the consumer quite a lot of money and will come back to hit users of heating fuels especially hard,” said Murphy.

“Substantial builds in gasoline and crude oil inventories have helped dropped the price of oil. Match those numbers with the prospects of a recession and we have the formula for dropping prices. The unknown variable of OPEC cuts are, however, raising its ugly head and I expect to see OPEC make production cuts in the area of 1.5 million barrels a day later this week, well ahead of their regular meeting of December 17th. If they cut less than that, I expect prices to keep dropping. Any more and that will help to temporarily support pricing of crude and their related refined commodities. All hinges on OPEC’s emergency meeting later this week.”

-30-

For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Another drop in prices coming, but...

From the look of things here in the nest in CBS, it certainly looks like we'll be looking at another round of drops at the pumps when the Petroleum Pricing Office sets prices again at the regular interval.

So far, five days of data are showing diesel to drop by 5.6 a litre, gasoline down by 4.5 and heating/stove oils to drop by an important 4.53 cents a litre.

I'll be cautious on this one. OPEC is meeting in the wings of the latest round of price drops to come and I expect them to make substantial cuts to production. Maret-watchers are looking at OPEC to cut production by a million barrels per day. I'm betting on them cutting 1.5 million as they've already cut some production. Iran has already reduced daily output to 3.7 million from 4.3 a day and Saudi Arabia has also reduced ahead of this so-called "emergency meeting".

While not necessarily true that any cuts would help to stabilize the price of oil somewhat, they are facing the prospect of a larger worldwide economic recession and they want to prevent any kind of a glut that could help crash the pricing of oil to them.

Expect an OPEC announcement as early as Tuesday on future cuts. If that's the case, it might be the last of the price drops we'll see barring any real collapse in the North American or European economy.

Why am I crossing my fingers?...

Regards,

George

Another break to consumers on the way
Numbers show interruption to pricing this Thursday

Media release

Conception Bay South, NL, October 13, 2008- Consumers can expect to see the benefits of the last weeks crash in oil prices again this week as the Petroleum Pricing Office will be forced to use the interruption formula to bring down pricing, that’s from George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

“Six days out of seven days data are showing good drops coming to diesel, heating and stove oils and gasoline. Diesel is expected to drop by 6.1 cents a litre, heating and stove oils by 6.65 and gasoline by 7.7 cents a litre this coming Thursday morning. Keep in mind that there may be slight changes to these numbers as there is still one more day to account for.

“The near collapse of the markets and the resounding drop in oil prices last week that bordered on the dramatic are chief reasons why pricing will have to be adjusted down. The numbers would have been substantially more except for the Canadian dollar losing almost 16 cents value against its US counterpart. In effect, consumers in Newfoundland and Labrador should be paying close to nine cents a litre less for gasoline than the new posted price this Thursday as a result of the loss of value in the Canadian dollar since September 29th. Heating and stove oil users would be looking at prices eight cents a litre less for the same reason. It goes to show that Canada is a little too dependent upon its natural resources for export rather than secondary processing. The dollar is weak compared to the troubled US currency and that says a lot.”

Update: heating and stove now shows 6.98 down, gasoline down by 7.7 and diesel down by 6.6 a litre. That's with seven days data. There will be interruption...At least, according to my numbers...
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For more information, contact;

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

To keep you up to speed...

Just to keep you all up to date on what's going on with prices...

Hold off on everything.

Heating and stove oils are showing seven cents a litre down, Gasoline is down by 8 and diesel is showing 5.8 cents a litre down as well.

With two more days to become a reality, I would expect that all fuels will fall under the guise of the confines of the interrupter formula and all pricing should be down AT LEAST that much as of Thursday.

I'll be cautious though, as there are still two more days data to get yet.

Stay tuned...

George

2008-09 Could be another expensive winter
Heating oil costs expected to meet or beat last year’s numbers

Media release

Conception Bay South, NL, October 9, 2008- Consumers in Eastern Canada can expect to pay the same price as last year for heating oil product and they have a good chance of setting new records for the fuel, that’s from George Murphy, group researcher and member of the Consumer Group for Fair Gas Prices.

What we may see this winter
“Consumers are facing an uphill struggle again this winter as several factors have played into the marketplace to work against the cost of heating and stove oils. As of today, we are presently 16 cents a litre higher than where we were last year and we are also facing a lower Canadian dollar. That in itself has cost the Canadian consumer an added six cents a litre this past week and is going to be hard to overcome,” said Murphy. “If these numbers hold up and nothing else changes and we see the same rate of increase as last year, we have a good chance of the consumer paying upwards of $1.38 a litre for heating oils this winter if I pare that with last years record of $1.22 a litre. That, I caution, is a number based on the actualities I see now and not the actual that may occur if consumers are faced with other outside issues or circumstances. Pricing may be mitigated somewhat simply because consumers won’t be able to afford the product in the first place.”

The “If Factors”
“We do have some conditions in the markets that may change the playing field and they remain a lot of what I call the “If Factor”. Refiner capacity, for example, remains at a historic low and this has affected the building of heating and stove oil inventories. They simply did not increase during the off-use season. OPEC is trying to put together an emergency meeting to discuss possible production cuts in an effort to help sustain pricing. If they cut production in the face of economic slowdown, then we can expect pricing to be supported. There are, of course, other geo-political conditions I don't need to touch on here.

Changing conditions
“Consumers can see the opposite happen if recession hits. Again, prices have a slight possibility of decline if the use of distillate fuels drop because of the economic downturn but that has also to be matched by an increase in refiner capacity and gains in inventory status in the United States. Again, if a slowdown does occur, industries who use number two oils will not need it and distillates may increase because of less tractor trailer use.

Impact of jet fuels on the winter heating mix
“While our winter heating mix contains 75 per cent jet fuel to #2 mix and, as of today those prices remain strong being almost a nickel a litre higher in value against last years numbers. I would have hoped that the drop in airline usage would have impacted that, but to no avail. Again, we have to see increases in inventories to impact the price and that simply isn’t happening.

Consumers and governments face the reality
“Consumers will have to take a long, hard look at the type of heating system they use at their homes. Heating oil usage has been measured at a historic low in the United States and has declined in use to only 7 per cent of the northeast population, the majority of the population of which have already made the switch back to either natural gas or electricity. It may be costly to do so but, there may be some worth in the consumer investigating the switch and cost-effectiveness of such a conversion. It may simply be a case of where heating and stove oils have become redundant means of heating even though there is still a consumer need.

“Government is looking at the rebate program in Newfoundland and Labrador but there has been no word yet on the program or what it entails. To add to that, the federal government needs to actively pursue their involvement in the rebate program on a national basis as they are chief beneficiaries to any taxes collected on heat. While a conversion to other forms of heating is expensive to consumers, government may also be forced to look at helping out consumers with the costs of conversion along with possible home retrofit-type programs to help consumers save.”

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For more information, contact;

George Murphy
Group researcher/member
Consumer Group for Fair Gas Prices

Financial crisis deepens, recession fears grow
Prices for petroleum products to drop on Thursday

Media release

Conception bay South, NL, October 6, 2008- The price for oil continues to drop in concert with the ongoing financial crisis worldwide and that will result in some pricing relief to consumers this week, that’s according to George Murphy, group researcher for the Consumer Group for Fair Gas Prices.

“While there is a strategic withdrawal from the commodities markets, traders have also been pulling out of the oil markets and that means a drop in the value of crude oil and its related refined products. Thirteen days data out of fourteen are now showing that gasoline pricing will drop by close to six cents a litre on midnight Wednesday,” said Murphy.

“Heating and stove oils are projected to drop by close on 2.2 cents per litre while, diesel pricing is forecast to drop by 1.7 cents per litre. I expect that, in the next couple of weeks, if the economic slowdown really kicks in, then diesel users will start to see some more solid drops, more substantial that we have been seeing as of late. As heating and stove oils are also part of the same distillate group of fuels, we’re hopeful that this may carry over to bring further relief to heating oil users.

“We have noticed that the Canadian dollar has lost a lot of ground against the US greenback in recent days, losing something in the order of seven cents against what it was two weeks ago. That alone has cost the consumer at least a nickel against the drop we are seeing. We should be looking at eleven cents down at the pumps. The drop in the dollar has also cost Canadian consumers as much, if not more, and we have no recognition that we have a problem with the Canadian economy. We’re told that the economic fundamentals are strong. We have the proof here that they are not. Some leaders really need to get their head out of the sand.

“We know that there still should be an ongoing concern that OPEC will step in and start to support the price of oil. I would be deeply concerned with winter heating oil pricing if there are a round of cuts. Any support of oil pricing at this juncture now means trouble for the Canadian consumer with the dollar slipping as it is.

“The real news this week in oil doesn’t come from the facts of Nigerian violence or ongoing promises of supply disruptions. Nor does it come from the fact that inventories of gasoline and crude oil improved. It comes from the fact that traders artificially inflated the price of oil in the first place and now, with the collapse of the financial markets and the promise of recession coming from the major Canadian banks, everyone is going to get burned. We may be seeing some price relief but it is far under what the markets should be really doing here. The failure to support the Canadian dollar at this time of crisis is the recognition that Canada is too reliant on one industry, that being oil.”


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UPDATE: All data in now shows 2.43 down on heating/stove oils, 2.0 down on diesel and 6.3 down on gasoline, all by the litre of course!


For more information, contact;


George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices

Changes coming to the update...

Starting this next week, a lot of viewers and readers will be noticing some changes to the update that I do on a regular basis and I figure that i would alert you to one major change that is coming over the next couple of weeks.

Users of diesel fuels will be of particluar interest as I believe that I can come out with accurate numbers to reflect changes to diesel pricing.

Fisherpersons and truckers take note...

Starting this week I will begin to make predictions on the movement of diesel pricing as new information and sources have recently come to light. It might take a week or two to develope the base price for the product but, a random sampling shows that the model I have been working on may be the cat's meow.

The update will now include three fuels, gasoline, heating oil (#2) and diesel fuels.

Look for those pricing changes in the next update.

In the meantime, gasoline still shows a drop coming (-3.7/Litre) this next week along with slight downwards moves for heating oils (-.10/Litre).

Stay tuned!

Regards,

George

Going...going...

Gone...

While other markets saw a substantial drop in pricing the day before yesterday, the rbound in the markets saw some pricing rise again...

Such was the case with the numbers on this end as well.

From the looks of things, we're going to have to wait another week before we seeanything drop at the pumps. The precipitous drop in the markets didn't last as I thought it would have and gasoline traded upwards again. That was enough to put the kaibash on any decrease we could have seen. Numbers were initially projected to range 4.5 to 5 cent a litre but then yesterdays market numbers changed that to closer to three cents.

That means no drop coming for diesels either and that stinks...

You need four cents before interrupt would happen to pricing...

Oh well...

Hopefully the markets will wake up and crash again before then and we'll see something more substantial for next week...

Regards,

George