Worldwide natural disasters and civil unrest have pushed international oil prices to new record highs and local analysts forecast a 42c/l price hike soon.
Worldwide natural disasters and civil unrest have pushed international oil prices to new record highs and local analysts forecast a 42c/l price hike soon.
Crude oil prices touched close to $50 (R320) a barrel yesterday as news of rebel attacks in the oil-rich Niger Delta region added to concerns of international oil supplies.
Rebels seeking reform in the impoverished oil-producing Niger delta have prompted Royal Dutch-Shell to halt production by 30 000 barrels a day as a precautionary measure.
Nigeria is the world’s fifth-largest oil producer and pumps about 2,5 million barrels of oil per day. The country’s output has already been reduced to safeguard the ageing production facilities.
The local petrol price is set to increase in October by 10c litre. Economist Tony Twine of Econometrix predicted that should the current trend continue, petrol prices could increase by as much as 42c/l by the end of the year. This would push the price of petrol up to more than R5 per litre.
“We’ve just entered the October account period for our fuel pump prices in South Africa so the rises in international crude oil will not affect us in October,” Twine said. “But if they remain at the current high levels, the petrol price will go up in November and December,” Twine said.
“At current prices for crude oil, inflationary warning signals are starting to flash. However, we are not yet at red alert. If Brent crude prices went to $50 a barrel, that would have me on tenterhooks,” said Twine.
Twine said that if the international oil prices remained below $50 a barrel, it was unlikely to cause any local consumer or producer inflation concerns. The strong rand had cushioned much of the rises in oil prices this year, he added.
World oil prices have been surging this year as added demand, mainly from the US and China, have placed strain on global oil stocks.
