Thank you, Mr. Speaker. Around the world, market prices for petroleum products have dropped substantially since the summer of 2008. Unfortunately, many of our remote communities have yet to benefit as fuel has not been purchased and delivered to them at the current lower prices.
Under the existing FMB approved pricing guidelines, the costs of purchasing, transporting and delivering fuel is recovered in the retail prices charged to customers in communities served by the petroleum products division. Prices are normally adjusted after each annual resupply to reflect the costs of the fuel purchased for resale.
In light of decreasing fuel prices worldwide, and in order to reduce the cost of living in our communities, there is a recognized need to pass a portion of projected future cost savings onto our customers as soon as possible, well before the annual resupply adjustments take effect.
Mr. Speaker, effective fiscal management has allowed the petroleum products division to
accumulate a modest budget surplus. This surplus will be significantly reduced to immediately lower the price of heating fuel and gasoline and provide relief to those customers most affected by the high cost of living in our remote communities.
On January 26, 2009, the petroleum products division reduced the current retail prices of heating oil and gasoline by 16 cents per litre for all non-government customers and community government customers. This will result in retail prices that better reflect the recent decline in the market cost of fuel. More importantly, it would immediately reduce the cost of living in the 16 communities served by the petroleum products division.
Mr. Speaker, all communities served by the petroleum products division will see further retail price adjustments after their annual 2009 resupply. For those communities resupplied by the winter road, the adjustment will take place this spring. For those communities resupplied by barge, the adjustment will be in the fall of this year.
Mr. Speaker, if current prices for petroleum products continue, additional reductions in the retail prices for fuel can be expected in 2009. Thank you, Mr. Speaker.