Update #2

Prices slightly up for this week
Increase in prices renews concerns over added fuel surcharges

Media release


Conception Bay South, NL, June 02, 2009- Most fuel prices will probably increase on Thursday but that’s not the big worry. The creep up in all fuel product prices is renewing concerns that some companies may be forced to consider the likelihood of adding fuel surcharges to account for the latest increases in prices.

Marine Atlantic costs to go up?
George Murphy, group researcher for the Consumer Group for Fair Gas prices says that businesses operating within the province should be concerned that there is a possibility that some costs will be increased because of the extra costs for fuel in recent weeks, leading to the possibility of added fuel surcharges again.

“We’re keeping an eye to Marine Atlantic who will be making the decision on added fuel surcharges later this month. The first time they did that back in 2007; prices for most marine type fuels were averaging close to 35 cents a litre when a fuel surcharge of two per cent was applied to passenger fares. As of the first of June, 2009 those numbers exceed that of 2007 by almost 2.5 cents a litre, creeping upwards in recent weeks and showing no signs of abatement. The province should immediately be concerned about any addition to prices crossing the Gulf and should be taking steps to ensure these costs are not going to be passed down to the consumer or to businesses in the province. We also have a very important tourism season to protect,” said Murphy.

“Our federal representatives should press the government in Ottawa to help the Department of Transport and the minister responsible, John Baird, absorb these added costs to Marine Atlantic. If they can step in to the automotive industry with financial assistance, they can help Marine Atlantic absorb the additional costs of marine fuels. We’re seeing the numbers increase and we still have time to deal with anything that is forth-coming provided the federal government is receptive to protecting the province from added increases to rates.”

On the consumer front
“Consumers in Newfoundland and Labrador can expect to see an added 1.77 cents a litre to heating and stove oils, an added one cent a litre to gasoline prices and 1.9 cents a litre on diesel fuels as a result of this past two weeks market activity. Even though numbers show inventories of crude oil almost 50 million barrels more than the average, prices continue to climb as a result of positive economic news. They may be positive for the provincial treasury but, it’s not so positive for the consumer when we see the removal of disposable income from the consumer’s pocket.”

-30-

For more information, contact;

George Murphy
Group researcher/Member