Tuesday, March 08, 2011

Fuel prices up again



FUEL prices for this month will see a big increase led by diesel and kerosene, The National reports.

Consumers in Port Moresby will now have to pay K3.26 for a litre of diesel, a rise of 15t, while kerosene is up 17t to K3.19 per litre.

Petrol, meanwhile, rose by 7t to K3.69 per litre.

Independent Consumer and Competition Commission (ICCC) Commissioner Dr Billy Manoka said given another increase in crude oil prices last month, demand for crude oil continued to reach high peaks in the Asia Pacific region.

However, the trend is heading for a repeat of high fuel prices last felt in July 2008.

Then, Port Moresby experienced the highest ever fuel charges with petrol selling at K4.20 per liter, diesel K4.19 and kerosene K4.

According the ICCC 2008 annual report, domestic prices decreased since August 2008 and this trend was maintained until December 2008.

This period of price reduction is the longest ever experienced in the country and the PNG consumers had benefited from these reductions.

This was due to the fall in crude and refined product prices as a result of a US-led recession which spread to Europe and parts of Asia.

From 2009 through to early this year, fuel and crude oil prices have continued to increase slowly but steadily.

Last month saw crude prices spiking due to political tensions in North Africa and several parts of Middle East.

This has caused crude oil prices to pass US$100 per barrel for the first time since 2008.

Changes in fuel prices are determined by global energy demand and supply and given that crude oil is a globally traded commodity, it is expected that demand and supply determinants in the major regions around the world, the value of the US dollar and other geo-political tensions in oil producing nations will continue to cause prices to change at any time in the future.

Manoka said should the crude oil continued to trade above the US$100 per barrel, then prices would have to be adjusted accordingly.

He said domestic prices would continue to fluctuate in the coming months should crude oil prices continue to trade below or above that mark.

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