Petroleum Pricing Office
Early adjustment warranted for gasoline prices
The Public Utilities Board’s Petroleum Pricing Office (PPO) has determined that an early downward adjustment to the maximum price for gasoline is warranted at this time.
The PPO usually sets the maximum prices for all fuels it regulates on the 15th of every month. However, decreased gasoline pricing on the New York Mercantile Exchange (NYMEX) have met the fuel-price regulator’s criteria to use its interruption formula (implemented when commodity prices increase or decrease an average of 3.5 cents per litre [cpl] over at least five business days provided it doesn’t interfere with the normal pricing schedule).
At , Tuesday, June 22, the price for all types of gasoline will decrease by 6.6 or 6.7 cpl (depending on the pricing zone and the HST rounding-off effect). There will be no pricing adjustments for other fuels regulated by the PPO at this time because the interruption criteria for these products have not been met.
Acting director David Toms explained that during the latter part of the 30-day period used to calculate June 15 regulation prices, gasoline figures were significantly lower than the overall average for that period. However, high prices at the beginning of that timeframe played a prominent role in minimizing the amount of the decrease when maximum gasoline prices were set last week.
Since then, gasoline prices have behaved such that they meet the PPO’s interruption criteria and require an early adjustment.
“Our office is monitoring fuel prices as it has in the past, and this pricing interruption can serve as further reassurance that we are continuing with our usual business of setting prices in an objective manner,” said Mr. Toms. “The public can feel confident that, given the ongoing volatility in the markets, maximum fuel prices remain justified. With our regulation model, prices do not increase or decrease in Newfoundland and Labrador as quickly as they do in unregulated markets, but when changes do occur, they reflect the true market conditions since prices were last set.”
NYMEX gasoline prices have experienced sharp declines, mainly
as a reaction to OPEC’s (Organization of Petroleum Exporting Countries) stated commitment
to increase its oil output quotas and ease fears about future supplies. On the
other hand, there has been ongoing violence in
Another development that is impacting upon market prices is
a strike in
Given the current market volatility, the PPO will continue to monitor conditions and will inform the public if any further adjustments are required before July 15.
- 30 –
Media contact: Michelle Hicks, Communications. Tel: (709) 489-8837.