The retail price of petrol will increase by between 66 cents and 68 cents a litre on Wednesday April 2. This is after increasing by 61 cents per litre last month, and 17 cents the month before.
91 octane unleaded petrol would go up by 68 cents a litre while 93 octane unleaded and lead replacement petrol will go up by 67 cents a litre and 95 octane by 66 cents a litre. The wholesale price of diesel 0.005% sulphur will increase by 130 cents a litre.
The retail price of a litre of 95 octane unleaded petrol in Gauteng increases to 891c/l and to 867/l at the coast – new highs.
It seems that the petrol price is on a mission to win a race. We’ve just had a massive increase and there’s yet another increase in less than three weeks. When is this going to stop, because at the rate we’re going, we’ll be hitting R15/litre in no time at all!
The above chart shows oil prices adjusted for inflation in December 2008 dollars. As you can see current prices in real (inflation adjusted) terms fell from July 2006 until January 2007 but then rose sharply from January through November 2007 with a slight decline in December.
When prices are adjusted for inflation the real peak price occurred back in 1979. At that time the monthly average price peaked at $38 per barrel (although the intraday prices spiked much higher).
The common price quoted is for the all time high of Oil prices is the price that the highest barrel ever sold for. That price doesn’t really have any effect on the price consumers paid. What really matters is the average price the refineries had to pay for the whole month. Interestingly, the highest monthly average occurred in December 1979 while the highest annual high occurred in 1980. Which means prices spiked higher in late 1979 and then dropped slightly but overall remained at higher levels throughout 1980.
Analysts are split on oil’s direction. Many think prices will rise to new records in coming months as the dollar resumes its decline. The US Federal Reserve is expected to cut interest rates several more times this year, and lower interest rates tend to weaken the dollar. Many analysts say the weaker dollar has been largely responsible for oil’s run to a record near $112 last week.
Other analysts argue that such high prices can’t be justified in an environment in which supplies are rising and demand is falling. Several forecasters have cut oil demand growth predictions for this year, and demand for gasoline has fallen for nine straight weeks. Domestic supplies, meanwhile, have mostly risen in recent weeks.
Very soon petrol companies will have to subsidize cars in the same fashion as cellular companies subsidize mobile phones. Now here is an idea – you take out a 5 year contract at a petrol station and get your new car from your local Shell or BP ;).