Wednesday, December 31, 2008

Happy New Year!
Pricing will be down on all petroleum products to start 2009

Media release

Conception Bay South, NL, December 31, 2008- Consumers in Newfoundland and Labrador can start off 2009 with cheaper prices for all fuel products measured as pricing is set to take another precipitous drop this Thursday, that’s according to George Murphy of the Consumer Group for Fair Gas Prices.

What consumers will see
“There’s not much change in the numbers from yesterday. Numbers still show heating and stove oil pricing will drop by 5.78 cents a litre, gasoline to drop by six cents and diesel down by 6.9 cents a litre. The news of this next round of decreases will be excellent for the consumer and, we hope that pricing will continue to drop into the New Year”, said Murphy.

Reasons for dropping prices
“Continuing worries over the economy, good inventory builds and dropping consumer demand for petroleum products have all played an active role in prices dropping this week. We’re hopeful that OPEC cuts will not take their full effect until late February which means that it will be too late to be of any worry to heating oil and stove oil users. Add to that, that if the bad economic news continues, OPEC cuts may have no effect at all in the near future. There simply won’t be a demand for crude oil as there won’t be anyone using it in a stagnant economy.

Historical numbers, if mine are right
“If my numbers are right and we see the six cent drop, we will see 79.2 cents a litre at the pumps. The last time gasoline prices were this cheap was back in July 2003 when gasoline was posted at 79.6 a litre. If my numbers are right with heating oil, we will be looking at pricing reflected of March 15, 2003 when the maximum allowable was posted at 62.67 cents a litre. For diesel, the last time I could find pricing this cheap was on February 15, 2003 when diesel sold for 89.5 a litre. It’s been simply a remarkable turnaround since September.”

Time to drop the nine per cent fuel surcharge
“Businesses in the province should start asking some serious questions about how they are charged fuel surcharges on incoming and out-going freight in the new year. Pricing for transportation fuels has come down quite a bit and they should investigate how much of a break these latest drops in fuel pricing should mean to their bottom line, especially with hard economic times waiting in the wings. Because the New Year is pretty much here, we also have to ask Marine Atlantic when we can expect another adjustment downwards to fuel surcharges to passengers and motor vehicle traffic. The final nine per cent fuel surcharge is yet to be dealt with and this is the month that Marine Atlantic was to top up the fuel tanks. Do they have a time-line they can share with the province on when we can expect the final adjustment to occur? The numbers for residual fuel oils, sometimes used for marine applications, have now bottomed close to March of 2005 levels, just two years before surcharges were first applied. It’s now time to remove the additional nine per cent fuel surcharge.”

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For more information, contact;

George Murphy
Group researcher
Consumer Group for Fair Gas Prices

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