NEWS

 

Hefty petrol price hike may hit SA

Cape Town - Next week petrol prices could rise 26c/litre and diesel prices 29c/litre if current market conditions remain stable for the remainder of the week, as shown by the latest figures from the Department of Energy.

On Friday higher oil prices and a weaker rand/dollar exchange rate increased the domestic underrecovery on fuel prices to 37c/litre for petrol and 48c/litre for diesel. The average underrecovery from the end of December last year to last Friday was 22.7c for petrol and 23c for diesel.

The next fuel price adjustment is expected on Friday, January 28 and the new prices come into operation on Wednesday, February 2.

The price increases could, for the first time since October 2008, push petrol prices in parts of the interior – such as North West and Limpopo – up above R9/litre again.

At the coast petrol currently costs R8.49 for 95 octane, and in Gauteng R8.58 for 93 octane. Wholesale diesel costs R7.70/litre at the coast and R7.84 in Gauteng.

Meanwhile the global oil market is in chaos.

Last week the price of oil grades in Africa and Asia broke through the $100 level, Brent crude oil contracts were heading for $98, and American oil price contracts were $88 a barrel.

Analysts ascribed the current price discrepancy between American and Brent crude to the limited production from the North Sea and emerging markets’ strong demand for Brent on the one hand, and record high stock levels at America's crude oil depots on the other.

Reuters reported that four of Shell’s North Sea oil and gas platforms were closed last week and would remain shut for some weeks.

Brent crude is extracted in the North Sea and Brent futures contract prices at one stage served as the standard for two-thirds of the global oil trade.

Bloomberg reported that Bonny Lite – a light oil from Nigeria with a low sulphur content and which thus produces more petrol and airline fuel in the refining process – last week for the first time since October 2008 had broken through $100.

A week earlier Tapis oil from Malaysia and Minas oil from Indonesia had already reached the $100 mark.

Analysts reckon the high prices of the African and Asian oil grades are putting increased pressure on the Organisation of Petroleum Exporting Countries (Opec) – the cartel of mainly Arabian oil-producing countries – to increase its official production quota.

 

Source: www.fin24.com

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