Dery cost going up
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IT NOW seems certain that fuel prices will remain unstable for at least the next six months. Large increases are in the pipeline following the domestic crisis in Iran, which stopped oil production for three months, and the OPEC countries' announcement of their intention to put up crude prices four times a year.
Many companies have been making up the shortfall caused by Iran by buying crude from "unusual sources." BP spokesman Geoff Mayhew, told CM "Whatever the extra costs we have to pay, we will have to ask the Price Commission to allow us to put up our prices accordingly."
Informed sources in the oil industry have put the price of a gallon of petrol at at least E1 this Spring. Although Mr Mayhew would not say how much of an increase the oil companies will ask the Price Commission for in their next applications.
When asked if BP diesel fuel would rise by the same percentage as petrol, he said "We have to calculate which sections of the public can bear a price increase and road haulage is a going concern."
There was a similar story from Mobil Oil, even though the company has not relied on Iran for its crude oil supplies for some years. "Inevitably there will be price increases this year on all petroleum production," said one of its spokesmen.
Applications for price increases covering the last OPEC January 1 increase went to the Price Commission two weeks ago.
If the Commission does not object within 28 days, these prices will be transferred to the consumer. Submissions to cover the next OPEC rise, due on April 1, are certain to follow shortly.
But there is no guarantee that the Price Commission will not be approached yet again in an attempt by the oil companies to re-coup their losses in recent months caused by revolution in Iran.
"It is not in our interests or the interests of the consumer for oil prices to rise," said Mr Mayhew, "but it is likely that we shall be going to the Commission again soon."