Is the honeymoon over?

Consumers to see increases this week

Media release

Conception Bay South, NL, July 3, 2012- Consumers in Newfoundland and Labrador will see an increase in prices for most petroleum products as oil rebounds with word of the European Union’s bailout of some Spanish and Italian banks. That has led to widespread speculation of a modest European economic recovery. That, and Iranian sabre rattling in the Straits of Hormuz, that is. That word from George Murphy, group researcher with the Consumer Group for Fair Gas Prices.

Oil rebounds

“It seems that the markets have taken a sharp turn upwards on word of a possible European economic recovery that is also leading to a possible cut in interest rates. Speculation is that it may lead to more disposable income for consumers in the troubled Eurozone. Refined commodity prices will be increasing this week as a result, along with oil’s rebound,” Murphy said.

“We also have some strong talk out of Iran that they will cut oil production in light of the European Union’s sanctions against Iran that may result in Iran removing something in the order of 3 million barrels a day of production from the world stage. It’s a retaliatory move to spark a form of protest against Iran’s developing nuclear program in which talks to dismantle the program have also broken off earlier this week.”

The numbers

“Consumers can expect to see heating and stove oil prices increase by 2.89 cents a litre, Diesel prices up by 3.7 cents a litre and gasoline to increase by 3.4 cents a litre when prices are adjusted for this Thursday. Last years numbers were slightly below with heating oils at 93.06/litre, Diesel at 130.1 a litre and gasoline at $1.28.8 at the end of June price setting.”

“The projections for summer fuel pricing still are on with the mid-July prediction for prices averaging $1.30 a litre for gasoline. In order for prices to exceed that, we’re going to have to see positive economic indicators from the chief consumer market out there, the United States, and so far, that has not been the case. Also waiting in the lurch is China. A slowdown there recently will also need to see the Asian country pull a positive move in freeing up money, probably by also tackling interest rates as a way to stimulate spending there. We’ll see what happens in the coming days.”

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For more information, contact;

George Murphy

Group researcher/Member

Consumer Group for Fair Gas Prices

Twitter: @GeorgeMurphyNDP