Jun 28 2005 07:24:13:003AM
By: Helena Wasserman
More new highs for oil
Oil closing in on $61
More airlines raise prices
Cape Town - The pump price of petrol is expected to rise by one of the biggest margins ever next Wednesday as world oil prices continued to scale record highs.
Crude oil prices reached record highs for the third trade day in a row and local petrol prices are expected to increase by between 30c and 45c a litre.
The price of diesel is expected to rise by between 45c and 50c per litre and diesel will probably become more expensive than petrol, Colin McClelland, director of the South Africa Petrol Industry Association (Sapia), said.
Government does not regulate the retail price of diesel.
McClelland said a number of factors contributed to the current oil problem. World demand for oil is about 83 million barrels a day and with the international economy growing between 3% and 4% a year, supply can simply not keep up.
Oil fields in areas such as the North Sea are drying up and upcoming oil producers like Angola (that is only producing 1m barrels a day) cannot meet the increased demand.
McClelland believes there are only two solutions to the crisis. "Economic growth must slow down or people must become more economical in their use of fuel."
The record high oil prices have seen several international markets react negatively.
In South Africa, higher fuel prices could lead to an increase in the prices of most consumer goods. Transport makes up a substantial part of input costs of products. And higher prices mean higher inflation, which could force the Reserve Bank to think twice before dropping interest rates.
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