Fuel prices continue a downward spiral

PORT MORESBY: Retail fuel prices have continued their downward spiral in the wake of the global economic crisis.

It is the fifth consecutive month pump prices have fallen throughout Papua New Guinea.

The current economic downturn has seen reduced consumer confidence and a subsequent easing of demand for crude oil and refined products worldwide.

As a result the price of crude oil fell to less than $US50 a barrel in recent weeks.

In the past few days it hit $US 47 a barrel … less than a third of what it was during July’s peak.

InterOil President Bill Jasper said that during the past month alone crude has fallen by about twenty-five percent or almost $US18 a barrel.

“There has been a corresponding reduction in the price of refined product”, he said

 “This includes diesel, gasoline, kerosene, Zoom and the aviation fuels”.

“The falls have been sudden and virtually unpredictable and, as such, reflect the uncertain nature of the current international economic situation”, he said. 

“Again we see the extent to which domestic fuel prices are determined by global forces”.

Mr. Jasper said tumbling fuel prices had given some relief amid fears of a worldwide recession.

“It’s the one bright light in an otherwise gloomy economic outlook”.

“Lower fuel costs will benefit businesses and help many companies cope in a tough economic environment”, he said.

“PMV operators especially will appreciate the trend away from the higher fuel prices of earlier this year”.

“Likewise, our domestic customers will notice the effect on the family budget”

Mr. Jasper stressed that falling fuel prices could be a double-edged sword.

“The fuel price determinant of supply and demand cuts both ways, for and against the interests of consumer”.

“At the moment prices are down”.

“However, when world economies become stronger it is probable demand for fuel products will increase, forcing the prices back up”.

“But predicting when this will happen is an inexact science.”

“We should enjoy the current lower fuel prices but remember we live in volatile times for the end of the year festivities”, Mr. Jasper said.

For further information and to arrange media interviews contact:

Susuve Laumaea

Senior Manager Media Relations InterOil Corporation

Ph: 321 7040

Mobile: 684 5168

Email: susuve.laumaea@interoil.com